HB 230: 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

Georgia currently offers no specific state income tax credit tied to building lower-priced starter homes. House Bill 230 would create one. Beginning with expenses incurred on or after January 1, 2026, a taxpayer who builds a new single-family home and sells it to an individual or related individuals for no more than $200,000 could claim a state income tax credit equal to 20 percent of the construction costs for that home. The credit cannot exceed the taxpayer's income tax liability for the year and cannot be applied to past years' taxes, but unused credit can be carried forward for up to five years. Taxpayers may also sell or transfer unused credits to other Georgia taxpayers once, subject to notification and compliance rules, including a requirement that any buyer of the credits acquire at least 60 percent of the transferred amount. The law would take effect January 1, 2026, applying to taxable years beginning on or after that date.

• Creates a new state income tax credit (O.C.G.A. § 48-7-29.27) worth 20 percent of construction expenses for new single-family homes sold at or below $200,000.
• Limits eligibility to construction expenses incurred on or after January 1, 2026, for homes sold to an individual or related individuals within that price cap.
• Caps the credit at the taxpayer's income tax liability for the year, bars use against prior years' taxes, and allows a five-year carry-forward of unused credit.
• Allows a taxpayer to sell or transfer unused credits once to another Georgia taxpayer, with a written notice to the Department of Revenue within 30 days.
• Requires any buyer of transferred credits to acquire at least 60 percent of the credits being transferred, and allows the state to disallow or recapture credits improperly claimed by a transferee.
• Sets the law's effective date as January 1, 2026, applying to taxable years beginning on or after that date.

Homebuilders and developers who construct new single-family homes priced at $200,000 or less, buyers of those homes, and other Georgia taxpayers who might purchase unused tax credits from builders. The Georgia Department of Revenue would administer the credit and transfer notifications.

Builders who construct lower-priced new homes could offset a fifth of their construction costs through a state tax credit, potentially making it more financially attractive to build homes near the $200,000 price point. Buyers of those homes are not directly taxed differently, but the incentive targets the supply of affordably priced new construction.

• Section 1 adds O.C.G.A. § 48-7-29.27, defining 'eligible construction expenses' as costs incurred on or after January 1, 2026, to build a home sold for $200,000 or less.
• Subsection (b) sets the credit at 20 percent of eligible construction expenses for taxable years beginning on or after January 1, 2026.
• Subsection (c) limits the credit to the taxpayer's tax liability, bars retroactive use, and allows a five-year carry-forward or transfer of unused amounts.
• Subsection (d) lays out transfer and sale rules, including a single-transfer limit, a 30-day notification requirement to the department, and disallowance for noncompliance.
• Subsection (d)(6) requires any transferee to acquire at least 60 percent of the transferred tax 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
• property development
• tax credit transfers