Provides an income tax credit for three years to a taxpayer who purchases a new primary residence for one million dollars or less.
TITLE OF BILL: An act to amend the tax law, in relation to providing a personal income tax credit for the purchase of a new home
PURPOSE OR GENERAL IDEA OF BILL: To provide purchasers of newly constructed one- or two-family residences, including condos and co-ops, with a $5,000 state tax credit returned to the homeowner after purchase. The purchasers can carry the unused portion of the credit forward for three consecutive years. This tax credit will stimulate New York's economy as well as provide incentive to those considering a home purchase.
JUSTIFICATION: Sales of existing U.S. homes in December 2009 plunged 17% - the biggest decline since records began in 1968 - to a 5.45 million annual rate from 6.54 million pace the prior month, according to the National Association of Realtors, and median sales prices rose for the first time in two years, reflecting fewer first-time buyers. For New York State, a decline in building permits - from 34,500 in June 2008 to 6,400 in June 2009 - reflected a major decrease in home sales. Single family homes in New York State fell by 16.2% alone in February 2009.
The federal government has provided home purchasers with a tax credit for first-time homebuyers and is extending this program up to mid 2010. Since 2006, median home prices in the state have dropped by more than thirty thousand dollars from $245,201 to $215,000.
The residential home construction industry has a positive impact on New York State's economy. This bill would help revitalize the economy while encouraging home ownership by allowing first-time home buyers to utilize a State tax credit on top of the federal government's tax-credit.
PRIOR LEGISLATIVE HISTORY: 2009-2010: S.3900 - Referred to Finance
FISCAL IMPLICATIONS: To be determined. Cost would be offset the additional taxes generated by the construction of the home.
EFFECTIVE DATE: This act shall take effect on the thirtieth day and shall apply to contracts executed after the effective date.
STATE OF NEW YORK ________________________________________________________________________ 1266--A 2011-2012 Regular Sessions IN SENATE January 6, 2011 ___________Introduced by Sens. ADDABBO, ESPAILLAT, LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Investi- gations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to providing a personal income tax credit for the purchase of a new home THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 606 of the tax law is amended by adding a new subsection (uu) to read as follows: (UU) REAL PROPERTY PURCHASE CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A CREDIT AS PROVIDED IN THIS SUBSECTION AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE PURCHASE OF ELIGIBLE REAL PROPERTY. THE AMOUNT OF THE CREDIT SHALL BE FIVE THOUSAND DOLLARS. ANY AMOUNT OF THE TAX CREDIT NOT USED IN THE TAXABLE YEAR IN WHICH THE RESIDENCE WAS PURCHASED MAY BE CARRIED FORWARD FOR THREE YEARS UNTIL THE FULL AMOUNT OF THE CREDIT HAS BEEN ALLOWED AND ANY AMOUNT NOT USED SHALL LAPSE. (2) IF BEFORE THE END OF A THREE YEAR PERIOD BEGINNING ON THE DATE OF PURCHASE OF SUCH ELIGIBLE REAL PROPERTY BY THE TAXPAYER: (I) THE TAXPAYER DISPOSES OF SUCH TAXPAYER'S INTEREST IN SUCH ELIGIBLE REAL PROPERTY, OR (II) SUCH ELIGIBLE REAL PROPERTY CEASES TO BE USED AS THE PRINCIPAL RESIDENCE OF THE TAXPAYER, THE TAXPAYER'S TAX IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR CESSATION OCCURS SHALL BE INCREASED BY THE RECAPTURE PERCENTAGE OF THE CREDIT AS DETERMINED BY REGULATION ADOPTED BY THE COMMISSIONER, FOR ALL PRIOR TAXABLE YEARS WITH RESPECT TO SUCH CREDIT. (3) IN THE CASE OF A HUSBAND AND WIFE WHO FILE A JOINT FEDERAL RETURN, BUT WHO ARE REQUIRED TO DETERMINE THEIR STATE TAXES SEPARATELY, THEEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01381-03-2 S. 1266--A 2
CREDIT ALLOWED PURSUANT TO THIS SUBSECTION MAY BE APPLIED AGAINST THE TAX IMPOSED OF EITHER OR DIVIDED BETWEEN THEM AS THEY MAY ELECT. (4) FOR THE PURPOSES OF THIS SUBSECTION, THE TERM "ELIGIBLE REAL PROP- ERTY" SHALL MEAN A NEWLY CONSTRUCTED ONE OR TWO FAMILY RESIDENCE IN THIS STATE, WHICH HAS NOT BEEN PREVIOUSLY OCCUPIED, PURCHASED FOR ONE MILLION DOLLARS OR LESS AND THAT IS THE PRIMARY RESIDENCE OF THE TAXPAYER. TO QUALIFY AS ELIGIBLE REAL PROPERTY, THE TAXPAYER MUST RESIDE IN THE PROP- ERTY AS A PRINCIPAL RESIDENCE FOR AT LEAST THREE YEARS AFTER THE PURCHASE OF SUCH ELIGIBLE REAL PROPERTY. S 2. This act shall take effect on the thirtieth day after it shall have become a law and shall apply to eligible real property purchased pursuant to contracts of sale executed after the effective date of this act.