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Calif. home builders hail passage of homebuyer tax credit
$10,000 credit likely to spur new-home construction, generate jobs and state and local tax revenues
California homebuilders saythe $10,000 tax credit for purchasers of new homes included in the new state budget will help jumpstart the depressed industry, creating jobs and much-needed tax revenue for state and local governments.
The Assembly today passed SB 15XX by Senator Roy Ashburn, R-Bakersfield, which establishes a tax credit of $10,000 or 5 percent of the purchase price of a newly built home sold between March 1 of this year and March 2010, or when funding is exhausted, whichever comes first. The measure is similar to a temporary federal tax credit enacted in 1975 that helped end a severe housing recession and rebound the nation’s economy.
Robert Rivinius, CBIA’s President and CEO, said the credit is a true win-win for homebuyers, homebuilders, and strapped state and local governments.
“The tax credit will help push prospective buyers off the fence and will help jumpstart the homebuilding industry, which last year built the fewest homes and apartments since we began keeping records in the early 1950s,” Rivinius said. “That will put people back to work, begin rebuilding the state’s economy, and provide much-needed tax revenues to the state and to local governments.
“In addition, because building a new home generates some $16,000 in state tax revenues alone, this tax credit will more than pay for itself and since the credit will be paid out over three years, it’s expected to provide a significant revenue boost this year.”
Rivinius also noted that first-time buyers who purchase a new home this year can take advantage of both the state tax credit and the recently enacted $8,000 federal tax credit – a huge incentive to buy a new home. (To learn more about the details of the tax credit, click here.)
The state Senate passed the measure over the weekend. Governor Arnold Schwarzenegger is expected to sign the budget package in the next couple of days.
Rivinius commended the Legislature for including the stimulus measure in the budget package, especially Senator Ashburn for carrying the measure and Senate President Pro Tem Darrell Steinberg, D-Sacramento, for making it part of the final package.
“Economists agree that housing leads the nation out of recessions, and with this stimulus we believe the depressed California homebuilding industry will begin to recover and help the state’s economy begin to rebound.”