In an online survey launched last week, Big Builder Online questioned its readers about California's $10,000 home buyer tax credit, which was approved by state legislators in February.
Unlike the federal $8,000 home buyer tax credit, California's home buyer credit is not limited to first-time buyers. The state credit allows any primary-resident buyer of a new home--resales are not eligible--an amount equal to the lesser of 5% of the home purchase price or $10,000. The only catch is that it's a limited-time-only deal. The state has a total budget package of $100 million earmarked for the program, and when it's gone, it's gone. Government sources indicate that the package should be able to apply to approximately 10,000 to 12,000 new home sales.
Two-thirds of survey respondents said they think the tax credit will help to stimulate home sales to some degree, with 44.4% saying it will be very effective and 33.3% saying it will be somewhat effective. However, 22.2% disagreed and said the tax credit will be ineffective in boosting home sales.
Almost half of the respondents, 44.4%, said they were uncertain if other states will follow California's lead in establishing their own home buyer tax credit, while 22.2% were optimistic that additional states will get on the bandwagon and create their own credits.
The majority of respondents, 94.1%, said they were not aware of any other states considering a home buyer tax credit. However, Big Builder Online reported that Georgia is considering one. The tax credit has yet to be voted on by the Georgia General Assembly, but it is proposing that home buyers receive a one-time tax credit of 1.2% of the purchase price for the first six months of the one-year eligibility, dropping to 0.6% of the purchase price the second six months, for the purchase of a $40,000 to $300,000 single-family home.
When asked what more can be done on a local level to stimulate housing, a few respondents said reducing fees and cutting back on expensive regulations would help. Another respondent noted: "We are in a very difficult time. The most effective way would be through incentives that create jobs. The state need not, and should not, micro-manage housing. When jobs return and affordability reaches the appropriate level, then the housing market will strengthen."