New-home tax credit near capacity

Builders urge California to triple $100 million program

More than 9,000 homebuyers have applied for a tax credit of up to $10,000 on new-home purchases in California, meaning the $100 million program is likely to reach capacity by the end of the month.

Through June 10, the state had received 9,145 applications for the credit totaling $88.2 million, and issued 3,219 certificates totaling $30.5 million. The program operates on a first-come, first-served basis.

Builders — who say the program has boosted not only their own sales but the ecomony itself, because it’s allowed them to put people back to work — are asking lawmakers to add another $200 million to the program.

With California facing a $23 billion budget deficit and slashing funding for schools, health care and prisons, builders are making three arguments for extending the credit.

A new home generates $16,000 in tax revenue to the state and about $3,000 to the city or county it’s located in, they say. New-home construction creates jobs and stimulates the ecnonomy because new-home buyers also spend money at Home Depot, furniture stores and landscaping companies.

An extension of the tax credit "is our top priority because we see it as getting our industry off its back and leading California out of its current economic and fiscal crisis," said Horace Hogan, chairman of the California Building Industry Association, in a statement.

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