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Thank you for your question.
Unfortunately you are unable to take personal labor, or value for your time working on your home.
However, if you can get your contractor to "hire you" and you work as a member of the crew, your wages are rolled into the cost of your home,which means you would capture your labor as part of the cost basis of the home, and you get paid to boot.
That is correct.
the cost basis of your home where you build it yourself is the cost of materials, and other expenses related to building. for example, building permit fees and inspections; insurance, etc. Then when you live in it; from that point forward it becomes your primary residence. You figure capital gains as:
Capital gains = sale price - cost basis - cost of selling.
If you live in it for two years, you can take the maximum capital gains exclusion of 250,000 if you file single or married seperate or head of household; or 500,000 if filing jointly.
If the capital gains did not exceed the exclusion for your filing status you would not pay any capital gains tax.