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California Realtors Press Gov. Schwarzenegger to Extend and Expand $10,000 Home Buyer Tax Credit
(SAN FRANCISCO, CA) -- Going down to the wire, the San Francisco Realtors Association is urging the California State Legislature to extend and expand the State's $10,000 home buyer tax credit program. The program is scheduled to expire next week.
The program, as currently constituted, covers buyers that purchase a home, between March 1, 2009 and March 1, 2010, that never has been occupied.
The tax credit is based on five percent of the home's purchase price or $10,000, whichever is less.
Home buyers receive the tax credit in equal amounts over three years. Unlike the $8,000 federal tax credit, California's is not limited to first-time home buyers.
In addition, there are no maximum income limitations so any buyer purchasing a previously unoccupied home can qualify for the tax credit. One hundred million dollars was set aside last year for tax credits relating to new home purchases.
In a prepared statement, the association says that during its one-year life, the tax credit incentive has "benefited struggling home builders and communities hard-hit by the recent recession where there is an oversupply of unsold homes that never have been occupied.
"The incentive has benefited the State, as well, because, according to economists, the sale of a new home generates more tax revenue than the tax credit costs."
Gov. Arnold Schwarzenegger has said that an important element in the State's economic recovery is a strengthened real estate market, according to the association statement.
"In that regard, he has proposed that the existing home buyer tax credit program be extended and expanded to include first-time buyers that purchase an existing home (in addition to buyers that purchase a home that never has been occupied)," the Realtors say.
Under the Governor's plan, which is embodied in SB 21 (Ashburn), the Franchise Tax Board would be authorized to extend tax credits to buyers that purchase homes until $200 million in tax credits have been granted. The program would then expire.
"We believe that extending and expanding the tax credit program, as described in SB 21, will serve as an impetus to reviving the economies of communities that have an oversupply of unsold homes, whether they be new or existing," the Realtors state.
When the federal first-time home buyer tax credit program was nearing expiration last year, the California Association of Realtors (CAR) conducted a survey of first-time home buyers that showed that 40 percent of buyers would not have purchased a home had tax credit not been offered.
"We believe this provides compelling evidence that tax credits stimulate home sales," according to the Realtors.
The association's statement says "economists throughout the country generally agree that the recovery of local economies will come when their real estate markets strengthen as a result of increased sales.
"The CAR survey demonstrates that sales increase when tax credits are offered. SB 21 provides a mechanism to hasten the revitalization of local economies throughout the State by strengthening real estate markets.
"The San Francisco Association of Realtors urges the California State Legislature to give SB 21 swift approval."
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