Slow-go for CA tax credit program

I had been wondering how the state incentive program would affect home sales in May and June, but after reading through an update by the Franchise Tax Board it doesn't appear as if anyone has the first clue. For one thing, the state is still taking applications despite having more than enough homebuyers to hit the $100 million allocation.

We are noticing more and more duplicate and invalid applications in our sampling. Because our computer system is expected to be released by the end of next week, we will soon be able to better estimate the number of possible duplicates. So that we do not risk cutting off the program too soon, we will wait for the computer system to be released before we determine when to stop accepting First-Time Buyer applications.

Housing economist Thomas Lawler finds it surprising that the computer system is still being developed.

For those who forgot, each credit enables an eligible home buyer to get a state income tax credit of up to $10,000, taken in equal installments over three years. The credit cannot reduce a borrower's tax to below zero, and last year's experience was that many borrowers were not able to take advantage of the full $10,000 credit.

It will take three to six months before applicants receive word about their tax credit.