On Monday, a new bill that would incentivize homeowners to sell their homes to first-time buyers received additional support before it’s committee assignment later this month.
Senate Bill 601, authored by Senator Rosilicie Ochoa Bogh (R-Yucaipa), would increase the capital gains exclusion on homes sold to first-time buyers. Specifically, SB 601 would, between January 2021 and January 2026, would give first-time homeowners an increased exclusion amount from $300,000 to $600,000 for joint filers. This would reduce the amount of capital gains the home seller would have to report as income on taxes. As the median price of a home in California is a little over $700,000, SB 601, also called the First-Time Home Buyer Opportunity Act, would erase capital gains taxes for close to half of all Californians home sellers selling to first-time homeowners for the next 5 years.
Senator Ochoa Bogh wrote the bill due to the housing crisis in California and the large number of first-time homeowners looking to buy a new home.
“Housing that is affordable in our great state is sadly out of reach for many Californians. It is time to remove barriers to homeownership and help hardworking families looking to buy their first home,” said Senator Ochoa Bogh last month. “That is why I have proudly introduced Senate Bill 601 to incentivize sellers to sell their homes to first-time homebuyers.”
Affordability continues to hamper Californian’s ability to buy a home. While only a first step, SB 601 would provide first-time homebuyers help achieving the American Dream of homeownership.”
While it was only introduced last week, support for SB 601 has grown considerably in the last few weeks, including several realtor organizations throwing their support behind the bill on Monday.
“This bill is very important,” explained “Rosie,” a realtor in the San Gabriel Valley suburbs of Los Angeles. “When we talk about what new buyers want, we have seen that most people don’t really want to rent, don’t want HOAs, don’t want condos, and most importantly, don’t want to live in multi-family residences.”
“First-time buyers, whether they are single people, couples, families, or even people wanting to go in on a roommate situation, they want to buy a home. And California lawmakers think that everyone wants these multi-family homes. They don’t. They really, really don’t. When we get their list of wants, whether they have a big budget or a smaller budget, they want their own home… their own property… they don’t want multi-family places. But they keep trying to rezone or limit new houses being built. They’re literally going to erase neighborhoods. People want single-family housing, by a large degree.”
“That’s why you’re seeing a lot of realtors and even those looking at retirement getting behind this bill. This will give new homebuyers a home and will give the home seller more money in their pocket.”
As of Monday, no known opposition has come out against SB 601.
SB 601 is expected to be assigned a committee later this month.
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