Legislature Approves New Homebuyer Tax Credit
March 22, 2010
A bill proposed by Gov. Schwarzenegger for an extended and expanded homebuyer tax credit moved to his desk Monday after a whirlwind day in which both houses quickly passed the legislation.
Senate Bill 6X 4, authored by Sen. Roy Ashburn, R-Bakersfield, had been moved to a suspense file earlier this month by the Senate Revenue and Taxation Committee. But in a procedural move Monday, the proposal resurfaced in the Senate Budget Committee as Assembly Bill 183, authored by Assemblywoman Anna Caballero, D-Salinas. The language mirrored the Ashburn bill.
The committee quickly acted on the proposal and sent it to the full Senate, where it passed by a 29-1 vote. It moved immediately to the Assembly, which approved the legislation minutes later by a 67-2 vote.
It now awaits the Governor's signature, which is expected Thursday since the proposal came from Schwarzenegger during his January State of the State address. Since then, he has made several public pitches for the tax credit, and last week sent a stern letter to legislative leaders seeking action on the tax credit and other proposals in his economic package.
Once the legislation is signed, the homebuyer tax credit will take effect May 1, one day after a federal homebuyer tax credit is set to expire.
The state tax credit sets aside $200 million in tax credits for buyers of both newly constructed homes and first-time buyers of existing homes. The money will be split evenly between the two.
Buyers can claim up to $10,000, or 5 percent of the home price, whichever is less for the purchase of a newly constructed home, which will be paid out over three years. Purchasers must live in the home for at least two years, and there are no income requirements.
The program will run until the end of the year or until the funding is exhausted. That happened quickly in 2009 when a similar program was in place.
The Governor, builders and other state leaders have pushed for the tax credit as a means to jump-start the economy, get builders back to work and hiring.
“”You cannot bring the economy back if people don’t have jobs,” Schwarzenegger said earlier this month in Salinas. “And that is why we have to have, you know, a vision for the future, and we’ve got to go and look at this as an investment for the future of California.”
-- Greg Robertson
