See update on this by clicking link:
On June 26, 2009 as a result of a special legislative session, Governor Beshear signed into law HB3, which contains incentives for new home purchasers. This measure recognizes the importance of putting people back to work in the hard hit construction industry as a means of increasing economic activity and tax revenues. We compliment the Legislature and Governor for their progressive recovery plan. A summary of their plan is below and detailed components of the bill follows
* In effect from July 26, 2009 to July 26, 2010. The new home must close during this period.
* Purchasers of new homes during that period will receive up to $5,000 non-refundable tax credit (non-refundable means that the credit will go against a tax liability to the state. i.e. if your state tax liability is only $4,200 you can only take a tax credit of $4,200, if your state tax liability is $6,2000, you can only take $5,000).
* The new home buyer must live in the home for at least two years or pay back the tax credit to the state.
* There is a total program cap of $25 million (5,000 homes or more depending on size of actual credits). The tax credit is over when that cap is reached or July 26, 2010 whichever comes first.
* Purchases are defined as anyone other than first time home buyers.
* The new home must be the home owner’s principal residence. A new home is defined as either detached or attached and has never been occupied.
* Within seven calendar days after purchase of a qualified residence, the qualified buyer shall submit a completed application for the new home tax credit on forms provided by the Kentucky Department of Revenue.
* The Department of Revenue will create a web site to explain the credit to the public and to keep track of the amount of the program cap dollars remaining.
Watch for additional information as the final regulations are published and check with your tax advisor to conform eligibility and benefits of the program. Contact Mike Kegley (859-657-6700) at B.O.L.D. Homes for the latest information.
|SECTION 104. A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO READ AS FOLLOWS: (1) As used in this section:(a) “Approved time” means three hundred sixty-five (365) days beginning thirty (30) days after the effective date of this Act;(b) “New home tax credit cap” means a maximum of twenty-five million dollars ($25,000,000) allocated to qualified buyers on a first come, first served basis;
(c) “Purchase” means a point within the approved time when escrow closes between the qualified buyer and the seller of the qualified principal residence;
(d) “Qualified buyer” means a resident who:
1. Purchases a qualified principal residence; and
2. Is not eligible to receive the first-time homebuyer credit allowable under Section 36 of the Internal Revenue Code; and
(e) “Qualified principal residence” means a single-family dwelling which is:
1. Either detached or attached;
2. Certified by the seller as having never been occupied; and
3. Purchased to be the principal residence of the qualified buyer for a minimum of two (2) years.
(2) (a) There is hereby created a one (1) time, nonrefundable new home tax credit against the tax imposed by KRS 141.020, with the ordering of credits as provided in Section 30 of this Act.
(b) The credit shall apply to the tax liability of a qualified buyer who purchases a qualified principal residence within the approved time.
(c) Within seven (7) calendar days after the purchase of a qualified principal residence, the qualified buyer shall submit via fax a completed application for the new home tax credit on forms provided by the department.(d) 1. The new home tax credit allowable to the qualified buyer shall be equal to five thousand dollars ($5,000), unless the new home tax credit cap has been reached.
2. If the new home tax credit cap has been reached, the qualified buyer shall not receive a credit.
(e) The new home tax credit is not refundable and any unused amount in the taxable year of the purchase cannot be carried forward or back to another taxable year.
(f) Any credit that reduced the tax imposed by KRS 141.020 shall be repaid in total if the qualified buyer does not occupy the new home for at least two (2) years immediately following the purchase.
(3) To administer the new home tax credit and new home tax credit cap, the department shall:
(a) Create the application required to be filed by a qualified buyer;
(b) Promulgate administrative regulations to administer the new home tax credit, including but not limited to:
1. The process of recapture of the credit if the qualified buyer does not maintain the new home as his or her principal residence for two (2) years; and
2. How to allocate the new home tax credit between unmarried co-purchasers or between married individuals who file separate returns;
(c) Create a Web site containing the amount of the total credit allocated to date, the date the last processed application was received, and the remaining credit available to qualified buyers;
(d) Establish a dedicated telephone line to receive faxed applications;
(e) Allow the date and time stamp from the faxed application as the order within which the application was received; and
(f) Notify the qualified buyer of the allowable credit available to the qualified buyer by a credit allocation letter, which shall be submitted by the qualified buyer with his or her return.
(4) The application for the new home tax credit shall be void if:
(a) The home has been previously occupied;
(b) The application is not received within seven (7) calendar days from the purchase; or
(c) The application is received after the new home tax credit cap has been reached.