Assembly Judiciary OKs bill with tax-credits for landlords

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The Assembly Judiciary Committee this week approved a bill that would create a voluntary tax credit program to help landlords recoup rent that’s gone unpaid during the COVID-19 crisis.

The bill, SB 1410 by Sens. Anna Caballero, D-Salinas, and Steven Bradford, D-Gardena, passed the Judiciary Committee on a 7-3 vote with one abstention. The legislation now heads to the Assembly Appropriations Committee.

To qualify for the credits, a rental owner would need to sign an agreement, pledging to defer rent that’s gone unpaid due to the coronavirus and not to evict the tenant for nonpayment. The tenant also would need to sign the pact. Instead of collecting back rent from the resident, the landlord would be reimbursed through tax credits from California. The tenant, meanwhile, would be liable for the unpaid rent and would ultimately need to repay California for the tax credits provided to the landlords.

SB 1410 is the only legislation that offers both tenant protections and financial assistance to landlords. While the legislation is promising, CAA has concerns about the time frame in which landlords would get tax credits. CAA is working with the authors to create helpful amendments for the bill.  As written, the bill would not provide the first tax credit for a number of years.

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