I sold my home and built a new home, what general sales taxes can I claim

[mhbfab10]

I contracted to have my new home built and was charged the general sales tax rate of 8.1% on everything and I have all the receipts. Can I deduct this as a major item and add it to the normal general sales tax deduction for all other items based on my income.

[IsabellaG · Accepted solution]

Yes, you can add the sales tax paid on the building materials used to construct your new home, under the following circumstances (please see Page A-6 of the instructions for Schedule A, for line 7.).

You can add to the sales tax table amount:

The sales tax on a home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies:

a. Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation.

b. You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly.

c. Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions.

In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly.