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NEWSFLASH: Homebuyer Tax Credit signed into law today in California

By
Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

"Late this afternoon, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. His actions today are the result of our efforts in Sacramento over the last several weeks as members and our team in the capital worked for the bill's passage before it landed on the governor's desk.

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.

The state's previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner.  Unlike last year's legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.

AB 183 will significantly contribute to the effort to stimulate jobs-creation within California's housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities."

Posted by

Regina P. Brown
Broker, Realtor®, M.B.A., e-Pro, GREEN
California DRE # 00983670
www.CalCoastCountry.com

                

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Comments (4)

Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Yes, I am probably going to write a blog a little later about the very same thing. I guess you beat me to it!

Mar 26, 2010 05:16 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Regina - AB183 sounds like a great idea, something we could surely use in Arizona to keep our housing market stimulated.  I am afraid that the way things are going, our housing market will not recover for many years.

Mar 26, 2010 09:28 AM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

California is taking the pro-active steps to move the market along in a positve motion, hope it helps you sell many homes.

Mar 28, 2010 10:16 AM
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor

Melissa, hey go ahead & write your blog, I'll by to comment!  No such thing as "too much" good news, eh.

Troy, CA needs a lot of help.  This is a very small step, but it's in the right direction.

Judi, thanks!

Mar 28, 2010 04:44 PM