From the latimes.com
Sacramento — After weeks of bickering over how to cut the deficit-ridden budget, Gov. Arnold Schwarzenegger and lawmakers agreed Monday to trim $1.1 billion from mass transit but give new tax breaks to home buyers and green-technology companies.
The linchpin of the legislation is the tax credit of up to $10,000 for first-time home buyers and those purchasing newly built homes. It would take effect May 1. Lawmakers are setting aside $200 million to pay for it. Buyers can receive 5% of a home purchase price back as a state tax credit, up to $10,000, as long they reside there for two years.
A similar program that passed last year was wildly popular. Buyers snatched up all $100 million in available credits within months.
From Business Week:
In January, the governor proposed a $200 million tax credit that would allow first-time California homebuyers to claim up to $10,000 for new and existing homes. An earlier tax break capped the credit at $100 million only for those who bought new homes between March 1, 2009, and March 1, 2010.
The extension would apply to homes purchased between May 1, 2010, and Dec. 31, 2010.
Sen. Roy Ashburn, R-Bakersfield, who carried the homebuyer’s tax credit bill in the Senate, said there is no question last year’s program created jobs. “At a time when California’s economy needs a real jolt to get moving … this bill will make a difference,” Ashburn said.
Here is the link to the FTB to apply – they haven’t enacted the new form yet though:
This is how I feel about it:
http://www.youtube.com/watch?v=HY-03vYYAjA
God forbid we just allow housing prices to drop to where people can buy them without taxpayer funded bribes.
We’re all sub-prime now!
I hate my government.
Seems like the govt wants home prices back up so people can get more equity out of thin air.Why are my tax dollars being used for these gimmicks?Seems like they know the economy is toast without getting free money via home appreciation.The taxpayers take the losses and the party continues.Why isnt there inventory for sale when thousands of people haven’t paid their mortgage in a year?Something seems really rigged here people.
seems to me like some people jumped too early.
I said once that it would take nearly 20,000 for me to buy an overpriced house… and if the 8K gets extended, I’m almost there.
Please, god, please expand all of the free housing subsidies!
Chuck
Lets reinflate the bubble. Hooray!
I expected something like this but it still makes me feel sick.
“trim $1.1 bilion from mass transit”
Hey, we can help the RE industry and car makers with the same bill! How’s that for thrifty use of your tax dollars?
Makes sense. Get people to buy property and trap them as taxpayers to California. Can’t really leave if you can’t sell your house can you?
I’m going to hold out for the million-dollar subsidies! 🙂
Will this nonsense ever end?
At what point do they finally realize this is the stupidest thing they could do in a cash-strapped environment?
not fair to give builders competitive advantage over my house for sale.
Technically, they aren’t using your tax dollars. they just aren’t stealing as much from tax payers that are buying their first home or a new home.
However they are discriminating big time.
Hey Jim,
A little OT, but there is a 1.8 acre lot (only because the house is really nothing) inland on Camino Orchidia in Encinitas with ocean view. You know this area well. If RSF closed at 1.2M with no view, this should come close at 1M. I mention this because there was quite a bit of talk a while back on what at view premium is worth.
I love my government. The more messed up the government and the economy. The more money I will make. Let the government get involved in every. Just like 1930’s in the United States and 1990-2010 in Japan.
Be careful people. It was debt that got us into this problem and nothing has been done about debt since 2008 except this time the government has added more.
I’m still not buying. Besides, why a tax credit when things are so good…? 😉
This won’t end well.
Let’s put out the fire by throwing more fuel on it. Let’s fix the druggie by giving him another shot of morphine. This type of stuff actually makes me want to wait even longer to purchase a home! This, to me, is a harbinger of bad things to come.
Shouldn’t that be …”smithereens” ?
An interesting side effect of all these state tax credits is a boost in Federal tax revenue.
If you pay $10,000 less in state taxes, then you cannot deduct that from your Fed taxable income.
If you’re paying 25% in Fed tax (marginal), then that’s $2500 more Fed. tax you will owe.
Hi Jim,
Assuming: 1. I am a first-time homebuyer; 2. I am buying a new home; and 3. Binding sales contracts is signed before April 30.
If I close the escrow on May 1, can I claim both Federal tax credit for a new home buyer ($8000) and this state tax break?
I think you can claim both:
http://blogs.wsj.com/developments/2010/03/24/californias-tax-credit-will-home-buyers-stampede-for-18000/