California Governor Arnold Schwarzenegger, whose last term in office will soon be terminating for good (we have limits, you know), has signed into law a measure that he hopes will pump some life into the state’s all but dead housing market. The new legislation, AB183, will provide a tax credit up to $10,000 to Californians who buy their first home or a newly constructed home. The tax credit goes into effect on May 1st.
Buyers who time it just right may also be able to qualify for the federal $8,000 first-time home buyer tax credit, for a total of $18,000 in write-offs. The federal tax credit is set to expire soon, though: contracts must be signed by April 30 and deals closed upon by June 30.
Now, in a state facing a budget deficit the size of the average black hole at the center of the cosmos, a piece of legislation that totals about $200 million is no small feat. Of that amount, $100 million will go for buyers of new, unoccupied homes; the other $100 million will go to first time buyers of existing homes.
One of the co-authors of the legislation, Democratic California Assembly member Anna Caballero (the other author was Republican state Senator Roy Ashburn) says on her web site, “I am very happy that my fellow legislators came together in a bipartisan manner to approve AB183, which is an economic stimulus and job creation bill.”
You have to either live in this state or closely follow it to understand just how significant a statement this actually is: If you think politics in Washington is partisan, hop on a plane to Sacramento. These guys make DC look like Disneyland!Back to the legislation: the new credit will cover home purchases made from May 1, 2010 to December 31, 2010, and will be available to home buyers on a first-come, first-served basis. According to the Governor’s website, the tax credit will be applied “in equal amounts over a period of three taxable years.”
Some caveats apply: the buyer cannot be a dependent and the home purchased can’t belong to a relative.
Sherri@groupmarin.com 415 497-2884