January 21st, 2009 11:26 AM by Lehel Szucs
With a focus on legislation that will stimulate California’s economy, Sen. Bob Dutton (R-Rancho Cucamonga) introduced SB 49 today, which will establish a homebuyer tax credit for single family homes.
Under the legislation being proposed by Senator Dutton, homebuyers who purchase a newly constructed single family home that will be used as a primary residence will receive a tax credit of up to 5 percent of the value of the home, not to exceed $10,000. The tax credit will apply to anyone who purchases a home between March 1, 2009 and March 1, 2010. “We must look at innovative ways to help stimulate the economy and revive the housing market,” Senator Dutton said. “SB 49 makes it easier for people to purchase a home, while helping to create jobs.”Similar legislation was enacted for a nine month period in 1975 when the nation was experiencing a similar slump in the housing market. That legislation resulted in a nearly 25 percent increase in housing sales the year following the enactment of the credit.Senator Dutton said that stimulating the housing market will not only help put people back to work in the construction industry, but in other industries as well. Other industries hurt by the housing slump include truckers, cabinet makers, utility workers, lenders, accountants, insurers and machinists, to name just a few of the businesses.According to Jim Earp, of the California Alliance for Jobs, “Construction is critical to the California economy and housing is a key element of the industry. When housing is down, we’re out of work.” The Wall Street Journal added in an opinion piece published in October 2008, that no economic recovery is possible without housing stabilization.“I believe that if we can begin to stabilize the housing market, we will see other areas of business begin to recover as well,” Senator Dutton said. “SB 49 is one tool to help stabilize and even revitalize California’s housing market.”With California’s struggling economy, Senator Dutton has decided to focus his 2009 legislative package primarily on bills that will create jobs and stimulate the economy. Details of those bills will be made available as they are introduced.