Homebuyer Tax Credit Passed By Legislature
A plan passed by the Legislature early Thursday to close a $42 billion budget gap included a homebuyer tax credit supported by CBIA.
SB 15XX, sponsored by Sen. Roy Ashburn (R-Bakersfield), contained CBIA’s tax credit concept. It had been introduced Saturday as the Legislature entered the final stages of putting a budget deal together and passed both the Senate and the Assembly by overwhelming margins. Though greater details on the homebuyer tax credit will be forthcoming, the following provides a brief summary of what SB 15XX authorizes:
• A tax credit of up to $10,000 (5 percent of home price or $10,000, whichever is less) for the purchase of a newly constructed, previously unoccupied home.
• Available starting March 1, and running until March 2010 or whenever the $100 million funding authority runs out.
• Allocated by the state’s Franchise Tax Board on a first-come, first-served basis (details still to be worked out).
• Paid out to home purchasers over three tax years in equal amounts (i.e. $3300 for 2009, $3300 for 2010, etc.).
• Purchasers must reside in the home for at least two years.
• There are no income limitations that have to be met by purchasers.
• There is no first-time homebuyer requirement.
• There is no repayment requirement (unless the purchaser sells or rents out the property before two years expire).
To help homebuilding companies prepare their marketing plans for the new tax credit, CBIA will soon be meeting with the Franchise Tax Board to iron out the mechanics involved in administering the program.
