HB230: HB230 Income tax; tax credit for certain expenses incurred by taxpayers that sell new construction homes to certain individuals for up to a certain price; provide

This bill adds a new section to Georgia's income tax law (O.C.G.A. § 48-7-29.27) creating a tax credit for builders who construct single-family homes and sell them to an individual or related individuals for no more than $200,000. Starting with expenses incurred on or after January 1, 2026, a taxpayer could claim a credit equal to 20 percent of those construction costs against their state income tax. The credit cannot exceed the taxpayer's tax liability for the year and cannot be applied to past years, but unused credit can be carried forward for up to five years. Builders could also sell or transfer unused credits to another Georgia taxpayer once per tax year, subject to notification and compliance rules, and a transferee must acquire at least 60 percent of the transferred credits. The law would take effect January 1, 2026, applying to taxable years beginning on or after that date.

• Creates a new 20 percent state income tax credit for construction costs on single-family homes sold for $200,000 or less.
• Limits eligibility to expenses incurred on or after January 1, 2026, for homes sold to an individual or related individuals.
• Caps the credit at the taxpayer's income tax liability for the year but allows unused amounts to carry forward up to five years.
• Allows a taxpayer to sell or transfer unused credits once per year to another Georgia taxpayer, with written notice to the Department of Revenue within 30 days.
• Requires any transferee to acquire at least 60 percent of the transferred credits and allows the state to disallow or recapture credits claimed without proper rights.

Homebuilders and developers who construct and sell new single-family homes priced at $200,000 or less, the individuals who buy those homes, other Georgia taxpayers who might purchase transferred tax credits, and the Georgia Department of Revenue, which would administer and track the credits.

Builders who construct lower-priced new homes could offset a fifth of their construction costs through a tax credit, potentially affecting decisions about building affordable single-family housing. The option to sell unused credits also creates a new market for buying and selling state tax credits among Georgia taxpayers.

• Section 1 adds Code section 48-7-29.27, defining 'eligible construction expenses' as costs to build a single-family home sold for $200,000 or less starting January 1, 2026.
• Subsection (b) sets the credit at 20 percent of eligible construction expenses for taxable years beginning on or after January 1, 2026.
• Subsection (c) caps the credit at the taxpayer's tax liability, bars retroactive use, and allows a five-year carry-forward.
• Subsection (d) permits a single annual transfer or sale of unused credits to another Georgia taxpayer, requiring written notice to the department within 30 days including credit balances and transferee tax IDs.
• Subsection (d)(6) requires any transferee to acquire at least 60 percent of the transferred credits.
• Section 2 sets the effective date as January 1, 2026, applying to taxable years beginning on or after that date.

1. 2025-02-06House Second Readers (House)
2. 2025-02-05House First Readers (House)
3. 2025-02-04House Hopper (House)

• Yasmin Neal (D, HD-079)Primary sponsor
• Dale Washburn (R, HD-144)
• Devan Seabaugh (R, HD-034)
• Noel Williams (R, HD-148)

• income tax credits
• affordable housing
• home construction
• tax credit transfers