New bill would end state tax breaks for second homes

Los Angeles /
Dec.December 21, 2016 08:45 AM

Lawmakers are considering a bill that would end tax breaks for second homes in order to fund affordable housing.

The bill, which was introduced before the California State Assembly last week, would revoke a tax break that allows homeowners to deduct mortgage interest on second homes from their state taxes, the Los Angeles Times reported.

Last year, 31,000 people took advantage of the tax break, costing the state about $300 million, according to Assembly member David Chiu, who introduced the bill.

Under the terms of the new bill, that money would now go to an existing program that creates low-income housing through tax credits, he told the Times.

“We need to ensure everyone has a roof over their head before we spend tax dollars to help a small group of people have two roofs,” he said.

The proposal, known as AB 71, is one of several new bills designed to increase funding for affordable housing and incentivize its construction. Another proposal would speed up the permitting process for neighborhoods that vow to reserve 20 percent of future development for low-income residents, while a third would speed up the permitting process in any city that has fallen behind on its housing production goals. [LAT]Cathaleen Chen


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