New Jersey Home Buyer’s Tax Credit Assists State Housing Recovery

The recovery of the New Jersey housing market is the focus of a new home buyer’s tax credit introduced by the state legislature. The New Jersey tax credits bill would target new construction, with most of the credits going towards sales of new homes.
New Jersey’s home building industry has suffered during the nationwide housing slump. Construction of new homes is at its lowest point since World War II, severely impacting construction worker unemployment. Legislators hope that the bill will help stimulate new home construction and sales.

New Jersey home buyer’s tax credit highlights

The proposed bill would give an income tax credit of up to $15,000 over a three year period.

New home buyers would receive 75% of the tax credits, while existing home buyers would get 25%.

The tax credit, if passed, would cost the state $100 million over three years; however, legislators and others in the housing industry believe that the credit would generate $200 million or more in state and local taxes in the first year.

A total of 6,667 buyers would be able to claim the credit, out of which 5,000 of them would be new home buyers.

Tax credits would be available on a first-come, first-served basis.

Home buyers would have to purchase their homes during 2010 to qualify, and live in the home as their primary residence for three years.

There would be no income limits on buyers claiming the credit.

The credit would be for 5% of the home purchase price, or $15,000, whichever is less.

The New Jersey tax credit bill would be in addition to a federal bill which already offers an $8,000 tax credit to first-time home buyers and a $6,500 tax credit to repeat home buyers. That credit has been extended to homes closing by June 30, 2010.