Proposal restores tax fairness for renters, reinvents program eliminated by Governor Arnold Schwarzenegger
(SACRAMENTO, CA) – Assemblymembers Tom Daly (D-Anaheim) and Phil Ting (D-San Francisco) urged passage of new legislation to restore tax relief for renters in California. Supported by a rare alliance of tenant and landlord groups, the bill faces its first vote in the Assembly Revenue and Taxation Committee this afternoon.
“California homeowners receive significant state and federal tax benefits, including the mortgage interest deduction and the homeowner’s exemption,” said Daly. “It’s reasonable to provide renters, who may not be able to purchase a home, with some tax relief, too. Housing is a fundamental need for all California families. The modest refunds established by this new program will offer thousands of families with a small measure of security. In addition, these refunds will also have a positive cumulative effect on the economy. The families and individuals receiving the assistance will spend that money at local businesses.”
“Compared to homeowners, renters really shouldered the burden of cuts to help California cope with its budget crisis,” said Ting. “As state finances improve, our tax policy cannot continue treating renters as second class citizens. Housing is expensive in California and this fact of life places pressures on working families still waiting for the economic recovery to benefit their bottom line.”
Assembly Bill (AB) 2175 would enact the Renter’s Tax Assistance Program to provide tax rebates to low-income renters. Rebate amounts would vary based on household income and range from $250 to $348 per year. In order to be eligible, individuals must have rented and occupied the property as their principal residence during the calendar year for which the rebate would be claimed. And, total household income could not exceed $42,588. Each application for assistance would be filed under penalty of perjury with the Franchise Tax Board, synched with state income tax filings.
“Renters are struggling across the state,” said Dean Preston, Executive Director of Tenants Together, a statewide organization for renters’ rights. “This rebate will make a real difference in the lives of low-income renters.”
“Homeowners get state tax breaks, but the same can’t be said for renters," said Debra Carlton, senior vice president of public affairs for the California Apartment Association. “This bill will correct that imbalance. With the cost of living climbing rapidly, low-income renters need a break more than ever. They need the Renter’s Tax Assistance Act.”
California established a renters’ tax benefit in 1967 but it was eliminated in 2008 when Governor Arnold Schwarzenegger used a line-item state budget veto.
“For many people like me, the renters’ rebate helps cover our basic needs,” said Mira Ingram, a disabled tenant from San Francisco who used to rely on the rebate to pay for wheelchair maintenance before the rebate program was defunded in 2008. She traveled to the State Capitol today to urge support of AB 2175.
A recent study by the Council for Community and Economic Research found that California is home to three of the top 10 areas in the country with the highest cost of living – San Francisco, San Jose, and Orange County. Many other states have tax benefits for renters. In Massachusetts, seniors who rent can claim up to $1,030 a year in tax benefits. In Michigan, all renters can claim up to $1,200. In New York, the maximum renters’ credit is $375.
Further information about AB 2175 is available at www.leginfo.ca.gov.
Contacts: David Miller (Daly), tel. (916) 319-2069, david.miller@asm.ca.gov
Anthony Matthews (Ting), tel. (916) 319-2019, anthony.matthews@asm.ca.gov