New Calif. tax credit for homebuyers

SACRAMENTO "They're all over the place. New homes just sitting empty, and it's a shame," said Vanessa Hunter, who is ready to take the plunge and buy a home.

Vanessa said she was indecisive for months, but the 24-year-old was enticed by California's new $10,000 tax credit for homebuyers.

"If the government is willing to put that money towards getting new houses, it makes you feel a little more comfortable," said Vanessa.

In a last-minute deal to get Republican Senator Roy Ashburn to support the budget compromise, he asked for the credit.

The properties in California must close escrow between March 1, 2009, and March 1, 2010.
The homes must be:

  • Brand new, single family homes
  • Never been occupied
  • Be the buyer's principal residence.

Californians can claim $3,333 per year for three years, beginning with the 2009 tax year. It aims to help new homes compete with the glut of foreclosures.

"Back in 1975, the U.S. Congress enacted a tax credit identical to this one, and it worked. It stimulated sales -- doubled sales within a year," said Tim Coyle, /*California Building Industry Association*/.

"We've been allocated $100 million to give out this credit. And, it's on a first-come, first-serve basis. Once it's been allocated, it's gone," said Brenda Voet, /*California Franchise Tax Board*/.

Even though the state's finances are tight, /*Governor Arnold Schwarzenegger*/ says leaders had to do something to help "ground zero" of the housing crisis.

"I think that investing in California and making investments that brings the economy back and creates jobs always is very wise," said Governor Schwarzenegger (R-California).

Luckily for Vanessa, she's also a first-time homebuyer, making her eligible for another $8,000 in federal tax credits. So her total break will be $18,000.

"If we all try to do what we can to put our confidence and our money back in, then that will really go a long way towards making things better," said Vanessa.

The /*Franchise Tax Board*/ is still designing the certificate for the tax credit. It should be put up on the board's Web site on Friday.


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