Assemblyman Jim Patterson, R-Fresno, has introduced a bill that would give first-time homebuyers a tax deduction when buying a home.
Assembly Bill 198 would allow homeowners to deduct several of the closing costs associated with buying a home such as documentation fee, appraisal fees, and lender fees from their taxes.
“The cost of living in our state is now pricing the middle class out of the dream of homeownership,” Patterson said in a news release. “This deduction will help California families get into their first home to start building equity.”
AB 198 comes days after the Trump administration suspended a pending cut to the Federal Housing Association’s annual mortgage insurance premium announced by former President Barack Obama just a week prior.
Borrowers with an FHA-backed loan, making a down payment of less than 20 percent, typically pay mortgage insurance, which lowers the risk to the lender making the loan.
If the mortgage insurance cut were to happen, California borrowers using FHA loans would have saved an average of $860 a year, the California Association of Realtors said.