Governor Schwarzenegger announced his 2010 proposals for California during his State of the State address this week. One of his proposals is a recommendation to set aside $200 million for a first-time home buyers' tax credit of $10,000. Unlike the previous $10,000 credit, this credit can be received for purchasing an existing home, whereas the previous year's tax credit only applied to new home purchases.

Home buyers can combine the state tax credit with the federal tax credit for home buyers. The federal tax credit provides qualifying first time buyers with an $8,000 credit and qualifying repeat buyers a $6,500 credit when purchasing a new primary residence. Buyers must be in contract by April, 2010 and close escrow by June, 2010.