In less than three months California has almost run through its $100 million allocation for new home buyer tax credits. The California Franchise Tax Board is now posting updated tallies of applications daily.
As of the moment it is past 11,000 applications and will accept 838 more before turning off the fax machine. Efforts continue in the Legislature to find another $200 million to extend it. Don't be surprised if this again becomes part of the deal-making to close a $24 billion budget gap.
The first $100 million was part of a deal to win a yes vote from Republican Sen. Roy Ashburn of Bakersfield to close a $42 billion gap last February.
The Wall Street Journal ran a story today about the tax credit running out:
Here's what it does (while it lasts):
* It applies to new California houses or condos bought as primary residences between March 1, 2009, and March 1, 2010.
* It's for 5 percent of the purchase price or $10,000, whichever is lower.
* The state will take $3,333 off a buyer's state taxes starting in the year of purchase and for two following years.
* The owner must live in the new home or condo for two years or lose the break.
* Collectively, the state tax break is limited to $100 million. At $10,000 per tax break that's 10,000 new dwellings.