Although there’s been tons of discussion about tax credits and the housing industry. Many feel that the tax credit last year did little to help motivate folks to purchase a new home – but there’s no disputing the fact that more houses DID sell during that little window of time last year.
North Carolina’s House and Senate passed on to the next level Legislation intended to pump up the New Construction business as they consider a bill that will provide a $10,000 tqax credit for those who purchase a new construction home in our state!
The North Carolina Home Builders Association supported this bill, which creates a NC STATE tax credit for North Carolina taxpayers who purchase a new home. The bill is currently in Committee in the NC House of Representatives, and the Senate.
House Bill 485 would allow taxpayers to take a maximum credit of $2,000 per year over the next five years against tax liability owed to the state. The Senate Bill 476 is very similar.
To achieve the maximum stimulus effect and create the maximum number of jobs, the tax credit would be available only for a new home constructed on or after July 1, 2011, or for a new home construction contract entered into on or after that date. The credit would expire June 30, 2012.
You would not be eligible for the Tax Credit if you have an ownership in the Company selling the property.
A total allocation of $100 million is being sought to provide 10,000 taxpayers with the opportunity to purchase a new home utilizing this credit. However, the state needs only to allocate $20 million per year over the next five years to fully fund this credit.
“While enactment of this legislation remains a long shot given the state’s record budget shortfall, our legislative team has been working very hard for several months to provide this important stimulus for our members and the state of North Carolina,” said Mike Carpenter, NCHBA’s Executive Vice President and General Counsel. “We realize how critical a housing recovery is to our state’s economy and our industry. This is our top legislative priority for this session and, given the current condition of our industry, perhaps it is our top priority ever. We will continue to work each day to try to get this critical program enacted.”
HB 485, New Home Purchase Stimulus, was introduced by Former House Speaker Harold Brubaker (R-Randolph), Principal Chair of the House Appropriations Committee, along with his three committee co-chairs, Rep. Mitch Gillespie (R-McDowell), Rep. Linda Johnson (R-Cabarrus) and Rep. Jeff Barnhart (R-Cabarrus). An identical Senate bill will be introduced later this week by Sen. Tom Apodaca (R-Henderson), Chairman of the Senate Rules Committee.
“We are delighted that these members have stepped forward in support of a strong stimulus for job creation in our industry,” Carpenter said. “I am also pleased to report that we are receiving bi-partisan support in the form of co-sponsors for this legislation.”
The tax credit proposal will create 16,199 new jobs (14,727 related to construction spending and 1,472 related to direct consumer spending), according to D. Michael Walden, Reynolds Distinguished Professor of Economics at NC State University. The job creation numbers are based on Dr. Walden estimate that 2,873 new homes will be constructed and sold as a result of the credit that would not otherwise have occurred.
Of course, the tricky part of all of this is getting the financing to BUILD the new construction properties! Right now, that is the biggest complaint from custom builders. With the down turn in the housing market, many Custom Builders in our state closed up shop or started working for the “Big Box” guys.
If you have questions about qualifying and purchasing a new home in NC – please call Steve and Eleanor Thorne, 919-649-5057. We have the best rates, and the programs you need!