California Tax Credit News from Salinas – CA

March 15th, 2010 – Governor’s Press Conference in Salinas, California

The California Homebuyer Tax Credit was the topic of Governor Schwarzenegger’s press conference yesterday from Sorrento at Monte Bella, a Standard Pacific New Homes project on one of the most beautiful sunny day’s we’ve seen in a while.

As he has with previous press conferences support the tax credit, the Gov again laid out the 5 points of his California Job Initiative plan:

  • Creating as many as 100,000 jobs because of the new hire tax credit,
  • Or wiping out, for instance, the sales tax on green tech manufacturing equipment,
  • Or streamlining the regulations to get shovel in the dirt as quickly as possible,
  • Or eliminating frivolous lawsuits that hurt businesses, especially small businesses and that kill jobs,
  • And, of course, to extend the Homebuyer Tax Credit.

Highlights from Tax Credit press conference

Governor Schwarzenegger:

And this is why we want to extend that tax credit again over but this time $200 million, so that we can inspire again people to go out and to buy homes, to get off the fence and to buy homes and to pump up the home sales. That’s what we want to do. I think that we have seen the great reaction that it had all over the state. And what we want to do is recognize that when we sell homes then we have to build more homes and then, of course, the carpenters go to work, the steelworkers go to work, the cement people go back to work, the plumbers go back to work, the electricians go back to work. So everyone gets jobs and that’s what we want to accomplish.

So my proposal is to extend that tax credit of $10,000 for the purchase on new and existing homes. We will offer a total of $200 million credit for homebuyers. We want to get people to buy homes again, that is the important thing. If it is new homes or for families that want to move up and go to bigger homes, in either case that tax credit is available.

Consistant with other other press conferences, he ends his speech with another plea to the legislators to respond to the Governor’s Job proposal.  I am yet to see a timeline on when he expects them to address this:

So as I said, that the legislators, we want them to respond as quickly as possible to our proposal, to our job creation proposal. And this is why I urge the legislators again to go and to approve our job creation package as quickly as possible. They can include their ideas, we don’t care — if the Democrats and Republicans can come together, bring their ideas, let’s merge all of those ideas together.

But let’s get going. The people of California deserve action; the legislators should create that action. And so this is why I urge them to go and to approve our package. Inaction is, of course, no option here, so this is why I just want to again put the spotlight on this very important issue.

Secretary of Labor, Vickie Bradshaw follows the Governor:

The housing tax credit is all focused on creating jobs. It’s getting people back into homes by building homes, getting rid of inventory so we can create long-lasting building of new homes into the future, which much of our recovery has been in the past, and we expect it’s going to be in the future.

Assemblymember Tran:

Well, thank you, Governor. You got my vote and you have me as a co-author for the legislation, of course, for the credit, the tax exemption for the house building. And it’s very important that we work together as a state to bring the state and the people out of this economy as we go into 2010 and 2011. And definitely I will talk to my leadership and caucus members again as we go through the state and push through the legislation that’s needed so that the people of California will have the jobs and, of course, the construction as we see here this morning, continue on. So thank you again for the opportunity.

And finally, the answer to the question that’s on everybody’s mind:

QUESTION: Can we afford it?

GOVERNOR: Yes, because it’s an investment. See, when we put people to work it will have a spillover effect, because then they go pay taxes, they’re off the unemployment, you don’t have to pay for their unemployment. And they go and they buy things and that money stimulates and that’s what gets the economy going. You cannot bring the economy back if people don’t have jobs. So that’s the way it works. And this is why we have to have, you know, a vision for the future and we’ve got to go and look at this as an investment for the future of California.

So there it is.  It does not look at this point like we will have an over lap of the Federal Homebuyer Tax Credit and the California Homebuyer Tax Credit, but it still looks promising that this Job Stimulus Plan will make it to the Legislature and when it does, it will include the Homebuyer Tax Credit.

The $100 Million funding for the first tax credit went very fast.  My best advice is to be in this market, actively looking and just pray that your timing is good.

The previous tax credit was available only for the purchase of New Construction, with severely limited it’s use, and it was still exhausted in a matter of months.

This new proposal is open to both New Construction and Existing homes.  That opens up the availability to a much greater pool of potential home buyers and I believe that we will see the doubled budget exhausted just as quickly as many more buyers will be eligible.

As always, I’ll keep you posted.

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2 Responses to California Tax Credit News from Salinas – CA

  1. Chris Eckeard March 17, 2010 at 12:39 pm #

    So is the CA Home Buyer Tax credit back to applying for a previoius built home? When does this come into effect?

    • Legacy Content March 17, 2010 at 1:00 pm #

      Hi Chris,
      The Governor is pushing pretty hard to get the legislature to approve it. Yes, it’s still being proposed for both New construction and Existing homes. No news yet on when it will go into effect but Arnold is making a lot of noise and gathering support.