Schwarzenegger wants to spur new home buying with tax credit

The Sacramento BeeJanuary 7, 2010 

More than 20,000 California homebuyers could get state tax credits of up to $10,000 this year under a new stimulus proposed Wednesday by Gov. Arnold Schwarzenegger.

The governor's plan to allocate $200 million in credits to buyers of new or existing homes is part of a job creation strategy. It goes now to state lawmakers for consideration.

"This is about helping eliminate extra housing to get construction back on tap," said Victoria Bradshaw, Schwarzenegger's secretary of labor and workforce development, in a call with reporters.

It's unclear how fast legislators might act. But last year, they handily approved $100 million in tax credits for buyers of new, unoccupied homes. The credits, claimed by 10,600 buyers from March through June, proved popular and ran out faster than expected.

Wednesday's announcement in the governor's annual State of the State address won praise from the state's struggling real estate sector.

"Wonderful," said Barbara Harsch, president of the Sacramento Association of Realtors. "Anything that will bring more buyers into the market, that allows more people to buy a home, is good for getting us out of the real estate slump. That eventually will get us out of the economic slump."

Building industry representatives said they wouldn't oppose extending tax credits to existing homes. But Allison Barnett, a lobbyist for the California Building Industry Association, said using credits for new home construction creates more jobs.

Would-be buyers hoped for quick passage.

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