The Senate Government and Finance Committee has approved Senate Bill (SB) 601, authored by Senator Rosilicie Ochoa Bogh (R-Yucaipa), which would incentivize those looking to sell their homes to consider first-time buyers by increasing the capital gains exclusion when selling to first-time buyers.
"Homeownership is the bedrock of the American Dream," said Senator Ochoa Bogh. "Too many young people are seeing this dream move further and further out of their reach due to the high cost of housing and lack of opportunity in California. I am so thankful that the chairman and my senate colleagues on the committee joined me in this effort to ensure homeownership continues to be attainable for future generations of hard-working Californians."
California is in the midst of a housing crisis. Median home prices for a single-family home top the $750,000 price range, which is more than twice the national average. The lack of housing supply to meet the drastic demand is unprecedented.
Our state has continuously been ranked the toughest state in the nation for first-time homebuyers due to the relatively high cost of housing, the tight market for available entry-level homes, and the struggle that young Californians face in saving for a down payment.
The First-Time Home Buyer Opportunity Act is the first step in leveling the playing field for first-time homebuyers. It would grant homeowners who sell their homes to a first-time homebuyer the ability to exclude capital gains of $300,000 for single filers instead of the current $250,000 maximum and $600,000 for joint filers instead of the current $500,000 maximum from their gross income.
SB 601 will next head to the Senate Appropriations Committee for consideration.
The following statement was made in support of Senator Ochoa Bogh's bill:
"We'd like to thank Sen. Ochoa Bogh for authoring legislation that will truly help first-time buyers striving to become homeowners. If passed, SB 601 will provide a powerful incentive for sellers to consider first-time buyers who are more likely to struggle with historically low levels of housing inventory. This bill gives the American Dream a needed boost." - East Valley Association of Realtors