If the case is that individuals are buying their first home, the phrase “tax breaks” probably catches their attention. In California, though, the answer is a bit more nuanced.
It is correct that there is currently no California first-time homebuyer credit or state-level tax break in 2025. But that does not mean first-time buyers are left without support. Instead, California presents helpful loan and grant programs that have a lowering impact on the upfront cost of purchasing a home.
A quick breakdown of what is available is listed below:
- CalHFA MyHome Assistance Program: This program presents deferred-payment loans to help cover down payments and closing costs. You will not need to repay until you sell or refinance.
- California Dream For All 2025: Though paused in 2025, this shared appreciation loan provided up to 20% of a home’s purchase price. It is not a tax break. Yet, it was one of the most generous California housing assistance for first-time buyers.
- Pathway to Home Closing Cost Grant: Provides up to $10,000 to qualifying buyers. Unlike a loan, this closing cost grant California buyers receive does not necessitate repayment.
- CalHFA ZIP Loan: Covers up to 3% of your mortgage amount to aid with closing fees, with zero interest and deferred payments.
- Local support: Cities like Los Angeles and San Diego have their own down payment and closing cost assistance programs.
Although none of these reduce the tax bill directly, they ease the financial strain at the most critical part of the process—buying the home.
On the federal level, there is no active first-time buyer tax credit either. Past programs, like the $8,000 credit from 2008 to 2010, have already expired. A proposed $15,000 federal credit has yet to be passed.
Summary for Tax Breaks
So, in a nutshell, there’s no first-time homebuyer tax break California residents can claim today. However, the available programs still make a big difference in affordability. If you are not sure about qualifications, contact Dimov Tax today for financial clarity.