HOUSING CONSTRUCTION TAX CREDIT

HB 325 creates two new tax deductions for businesses building or selling new residential housing in New Mexico. It allows a deduction for labor costs incurred during construction (Section 2) and deductions of up to $125,000 per year for sales of new residential housing (single-family homes, townhouses, condos, or apartment buildings) or $75,000 for housing intended for lease (Section 3). The bill also includes a "hold harmless" provision (Section 1) requiring state distributions to municipalities and counties to offset potential revenue losses from these deductions. The bill, which would take effect July 1, 2025, directly affects developers, contractors, and real estate sellers of qualifying new housing.