NCHBA’s proposed $10,000 tax credit for the purchase of a new home is no longer under active consideration by the General Assembly. A total allocation of $100 million was sought under this legislation (HB 485, SB 476) to provide 10,000 taxpayers with the opportunity to purchase a new home utilizing this credit. The legislation would have allowed taxpayers to take a maximum credit of $2,000 per year over the next five years against tax liability owed to the state. To achieve the greatest stimulus effect and create the maximum number of jobs, this tax credit would have been available only for a new home constructed after July 1, 2011, or for a new home construction contract entered into on or after that date.

“The proposal proved to be too expensive in light of the state’s record budget shortfall,” said Mike Carpenter, NCHBA’s Executive Vice President and General Counsel. “We always understood that the enactment of this legislation was a long shot but, nevertheless, it was one that we pursued vigorously in an effort to help our industry recover by helping to attract prospective buyers back into the market. We were very pleased with the strong bipartisan support the proposal received and the serious attention it garnered from the legislative leadership.”

House Bill 485 was introduced on March 25 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). A total of 43 other House members, 36 Republican and 11 Democrats, co-sponsored the bill in the House. Senate Bill 476 was introduced by Sen. Tom Apodaca (R-Henderson) along with 24 co-sponsors, 18 Republicans and 6 Democrats. “Both Rep. Brubaker and Sen. Apodaca understand the vital role that our industry plays in the state’s economy and they are to be congratulated for their strong advocacy on behalf of this proposal,” Carpenter noted.

“The job creation potential of this proposal made it attractive,” Carpenter said. “Dr. Michael Walden, Reynolds Distinguished Professor of Economics at NCSU, estimated that 2,873 new homes would be constructed and sold as a result of the credit that would not otherwise occur spurring the creation of 16,199 new jobs. However, those numbers could only be obtained if the tax credit was prospective creating an issue for those builders holding current inventory. This dilemma was resolved in favor of the prospective application of the credit by the NCHBA Board of Directors at its meeting in Pinehurst in February.”

“While this proposal is no longer on the table, NCHBA will continue to pursue its very ambitious 2011 legislative agenda,” Carpenter said. “The legislative leadership has assured us of their interest in helping our industry recover since they understand that the state’s economy will not recover until housing recovers. ”