Remember that $10,000 tax credit for buyers of new unoccupied homes that was all the rage this spring and then disappeared when the state Franchise Tax Board pulled the plug on applications on July 2?
It might be back for Round 2, up for a state Senate vote as early as today.
The Legislature is in its final frenzied week, and the eyes of the home building industry and buyers who might try for a tax credit for buying a new unoccupied home in California are on AB765, by Assemblywoman Anna Caballero, D. Salinas.
That would bring a tax credit to an estimated extra 4,285 California buyers, alongside 10,659 who have already qualified for the credit before the state Franchise Tax Board shut off applications on July 2. (Roseville and Sacramento were among the Top 10 cities where residents claimed the tax credit).
The simple story is this: The Caballero bill reauthorizes the credit with $30 million that the FTB expected wouldn't be claimed. Original thinking was everyone who qualified would likely get the full $10,000. But a closer look by FTB in this legislative analysis showed that the average buyer wouldn't owe enough state taxes to claim the full amount. The average is closer to $7,000 - thus allowing more applicants for the entire $100 million pool created in February.
The bill must be passed by the Senate, re-approved with changes by the Assembly and then signed by Gov. Arnold Schwarzenegger. The conventional thinking is this has a green light - as a means of stimulating jobs and the larger economy. Some economists say it doesn't really do much, and other critics wonder why the state is helping builders put up new homes when there's already a glut of unsold homes in California.
And still others question subsidizing new home owners. But the wheels are in motion and this will likely pass, allowing more first time-buyers to jump in the game and combine this with a federal $8,000 tax credit set to expire Nov. 30 unless Congress reauthorizes this one, too.