From the

Sacramento — After weeks of bickering over how to cut the deficit-ridden budget, Gov. Arnold Schwarzenegger and lawmakers agreed Monday to trim $1.1 billion from mass transit but give new tax breaks to home buyers and green-technology companies.

The linchpin of the legislation is the tax credit of up to $10,000 for first-time home buyers and those purchasing newly built homes. It would take effect May 1.   Lawmakers are setting aside $200 million to pay for it. Buyers can receive 5% of a home purchase price back as a state tax credit, up to $10,000, as long they reside there for two years.

A similar program that passed last year was wildly popular. Buyers snatched up all $100 million in available credits within months.

From Business Week:

In January, the governor proposed a $200 million tax credit that would allow first-time California homebuyers to claim up to $10,000 for new and existing homes. An earlier tax break capped the credit at $100 million only for those who bought new homes between March 1, 2009, and March 1, 2010.

The extension would apply to homes purchased between May 1, 2010, and Dec. 31, 2010.

Sen. Roy Ashburn, R-Bakersfield, who carried the homebuyer’s tax credit bill in the Senate, said there is no question last year’s program created jobs.  “At a time when California’s economy needs a real jolt to get moving … this bill will make a difference,” Ashburn said.

Here is the link to the FTB to apply – they haven’t enacted the new form yet though:

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