After defunding the renters' and homeowners' tax assistance program (known as the "renters' rebate") on grounds that the state could not afford to make any tax rebate payments to low-income senior, blind and disabled Californians, the Governor has signed new legislation to give $100 million in tax credits to people who buy homes between March 2009 and March 2010.
The new Home Buyer Tax Credit gives purchasers who buy a never-before-occupied single family home a tax credit of 5 percent of the purchase cost up to $10,000. The new tax credit program for homebuyers will cost the government one hundred million dollars ($100,000,000).
This credit is available regardless of the income level of the home buyer. A millionaire who buys a newly constructed house this year will get a $10,000 gift from the government.
The Governor's move is another slap in the face to low-income Californians. In September 2008 the Governor used his line item veto to eliminate all renters' rebate funds. In January 2009, the Governor released his 2009 budget, again eliminating all renters' rebate funds. The renters' rebate is a longstanding program that provides a modest annual tax rebate check to low-income senior, blind and disabled renters and homeowners. According to the Governor, the rebate program could not be funded because the state lacked money to pay for it, a claim belied by his signing of the new home buyer tax credit.
Apparently, the Governor prefers to give $10,000 each to individuals who are well off enough to be buying new homes in the current economy, rather than continue a program that provides an annual $347.50 payment to low-income senior, blind and disabled Californians.