Tuesday, March 23, 2010 - The building industry received some help late yesterday when Governor Arnold Schwartzenegger approved $100 million in tax credits for first time homebuyers and $100 million for those buying newly constructed homes between May of this year and August 2011.
The credit amounts to 5% of a home's purchase price up to $10,000 over a three year period. This came just hours after the legislature approved tax breaks with strong bipartisan votes during a session that focused on putting Caifornians back to work and encouraging economic recovery through tax breaks.
The previous tax credit was for $100 million and only for new homes purchased between March 1, 2009 and March 1, 2010, but the funds were exhausted early -- by August of last year. The new State program, allowing $100 million for first time home buyers and $100 million for new home purchases, along with the Federal tax credit of up to $1500 or 30% of the purchase of energy-efficient windows and doors, is expected to encourage home improvements as well as home sales.
The bill also eliminates sales tax for the next ten years on manufacturing equipment purchased by companies making green technology.
Critics prefer the reduction of the deficit to stimulate an economic recovery. The homebuyer tax credits are expected to cost the state $70 million in 2010 alone.
The cost of driving from job-to-job isn't getting the break the Governor had hoped for. He wanted consumers to receive a 5 cent tax cut on each gallon purchased. Instead, the legislature increased money to the transit agencies scheduled to receive hundreds of millions more than than they would have under the current system, including $450 million in 2010-2011.
© 2010 Dolan's Lumber, Doors & Windows
