Tax Credits Boost House Construction
A number of home builders are currently experiencing the long-awaited boost in sales in the past six weeks. This is due to the new-home tax incentive in California. According to the Franchise Tax Board of the state, home buyers got more than $30 million of the $100 million pot money for California. This has created the boost for house construction, and experts are now monitoring how this activity would affect the building industry in the long run.
Aside from the state credit, another tax credit, specifically a home-purchase tax credit, is on its way through the house construction industry. According to Terry Kent of Crestwood Communities, house construction has now tripled in more than half of the communities where their properties are located. The Glendora-based form has experienced growth since February, with four homes being sold. This is a big jump from then, with only one or two homes being sold. Because of this, Crestwood now has around 25 building permits to start new home construction in different communities. According to Kent, this tax credit is expected to be gone around May, after all of it has already been used up.
This happened because of the action taken by the California Building Industry Association. This is California’s largest association of home builders. Through its persistence, the tax credits were approved and are now being used to boost the house construction industry. According to Tim Coyle, the association’s senior vice president, the tax credit fund worth $100 million might need to be expanded soon, so that the momentum would not be lost. However, getting the approval of lawmakers might be difficult.
California governor Arnold Schwarzenegger, along with six republicans and other democratic lawmakers, agreed on a proposed budget for the state. However, there are risks and threats that this might not get approved. It might not be able to pass voter approval this coming May, giving the legislature more pressure to be able to come up with a solution to fix California’s deficit worth $42 billion.
According to Coyle, this is needed to fund more new home construction projects. He added that some home builder projects across California had experienced an 80-percent increase at model homes from February to March. Furthermore, sales of new houses are continuously increasing. This is a very good time for the house construction industry.
