California Home Buyer Rebate: See How Much Cash You Get Back

Frequently asked questions

Are home buyer rebates legal in California?

Yes. Commission rebates to buyers are legal in California. Most buyers can get about 2% of the price back in cash at closing.

How much is a buyer rebate in California?

About 2% of the purchase price, paid to you in cash at closing. On California's median-priced home (about $854,000) that is roughly $17,080.

How do I get a rebate when buying a house in California?

Ask a buyer's agent, before you sign a representation agreement, whether they will rebate part of their commission. If they agree, get it in writing; it usually comes as a credit toward your closing costs or a check after closing.

Does a buyer rebate cost me anything?

No. The rebate comes out of the buyer's-agent commission, which the seller pays and which is already built into the home's price. A rebate simply returns part of that money to you, at no extra cost.

Is a buyer rebate taxable in California?

Generally no. The IRS treats a buyer rebate as a reduction in the home's purchase price, not income, so you lower your cost basis by the rebate amount instead of paying tax on it (IRS Letter Ruling 157111-06). This is general information, not tax advice.