Thursday’s new California budget provides a $10,000 state tax credit to people who buy a new house soon. And the $787 billion stimulus bill signed Tuesday by President Obama gives an $8,000 federal tax credit to first-timers buying new or resale homes. So some home buyers this year can set themselves up for $18,000 off their taxes.

It applies to new California houses or condos bought as primary residences between March 1, 2009, and March 1, 2010.
– It’s for 5% of the purchase price or $10,000, whichever is lower.
– The state will take $3,333 off a buyer’s state taxes starting in the year of purchase and for two following years.
– The owner must live in the new home or condo for two years or lose the break.
– Collectively, the state tax break is limited to $100 million. At $10,000 per tax break that’s 10,000 new dwellings.

So only the first 10,000 get it!

Foreclosures have been getting snapped up over the last few months - and MDA DataQuick shows 78% of homes repossessed during June 2007 and November 2008 have been resold already in Sacramento County. 

For many young couples, plummeting prices and record-low interest rates make it possible to own a home in California for the first time. And of course, Investors can snap up foreclosed properties for cheap and sell them during the next boom, one that is possibly not far off.

It looks like many dreamers are striking gold during the housing bust...

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