Money for new home tax credit running out
| Tuesday, Jun 23 2009 04:52 PM
Last Updated Tuesday, Jun 23 2009 04:52 PM
Time is running out to apply for a temporary tax credit on the purchase of new homes.
Under a program that began in March, buyers of new homes can receive a tax credit of 5 percent of the value of the home, not to exceed $10,000. The program runs through March 1, 2010, and is capped at $100 million.
But as of last week, the state's Franchise Tax Board had received more than 9,800 applications claiming nearly $95 million, said board spokeswoman Denise Azimi.
"It's been going pretty fast," Azimi said. "So if anyone is interested, we want to get the word out that they need to apply quickly."
Eligible applicants must have bought a home on or after March 1, 2009 and before March 1, 2010.
Because some applications are duplicates, revisions, or invalid, the state plans to accept 12,000 applications. This will ensure enough valid applications will be available to allocate the full $100 million credit, Azimi said, but credits will be granted only until the $100 million is exhausted.
Pending legislation would give prospective buyers some wiggle room.
Senate Bill 49, sponsored by Sen. Robert Dutton, R-Rancho Cucamonga, would remove the funding cap, but keep in place the provision that the home must be purchased before March 1, 2010.
Assembly Bill 765, co-authored by assembly members Anna Caballero, D-Salinas, and Jose Solorio, D-Santa Ana, would increase the cap from $100 million to $300 million and allow buyers to reserve the credit at the time of the purchase agreement rather than at the close of escrow.
The California Building Industry Association strongly favors an extension.
"This was a program that was supposed to last a year, and it's been burned through in a few months," said Bob Decker, executive director of the association's Kern County office. "It's working as intended and has filled in the gap for a lot of potential buyers out there.
"I don't think it makes the difference for all of them, but for many of them, it's definitely helped."
