Builders pushing to expand California home purchase tax credit
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California home builders want the state to triple spending on a new home tax credit that has been in effect since March. The credit, for 5% of the purchase price of a new home, up to $10,000, is good until March 1, 2009, or whenever the money allocated runs out.
So far, the program is a hit: There is $100 million is available for the credits and, as of May 6, applications had already been filed for roughly $55 million.
With the funds going quickly, the California Building Industry Assn. wants an additional $200 million for tax credits. A bill introduced by Assembly members Anna Caballero (D-Salinas) and Jose Solorio (D-Anaheim), and a companion Senate bill introduced by Ron Calderon (D-Montebello) would add the funds and allow buyers to lock in the tax credit upon signing a contract for a home, rather than at the close of escrow. That would allow them to be eligible for the credit if their sale closes after the March 1, 2010, deadline.
The California Franchise Tax Board has an informational website on the credit.
--Peter Y. Hong