Provides a real property tax exemption for first-time homebuyers of pre-owned real property as primary residential property

Title of bill

An act to amend the real property tax law, in relation to exempting pre-owned real property purchased by first-time homebuyers from real property taxation

Purpose

To provide localities with an option to allow for a partial real property tax exemption for first-time homebuyers of pre-owned homes. The intent of this legislation is to assist potential homeowners in their ability to afford low to moderately priced housing in New York State. The property price limitations and the income limitations for the family are the same as those set for each county by the State of New York mortgage agency low interest rate mortgage program.

Summary of provisions

This bill would allow localities to provide a partial tax exemption for a period not to exceed five years for first-time homebuyers of pre-owned homes. The maximum exemption would be 50% in the first year and would be phased out by 10% each year thereafter. Localities would have the option of providing a lesser exemption and or a shorter period of exemption.

In order to qualify for the exemption, neither the homeowner nor their spouse shall have owned a primary residential property, a vacation home or an investment home during the three year period prior to the purchase of the primary residential property. Additional qualifications include a purchase price limitation and a household income limitation. The maximum sales price must not exceed the maximum property price limits as allowed by SONYMA on its Low Interest Rate Mortgage Program by more than 15% unless a municipality opts to allow for a maximum sales price of not more than 25% above the price limits set by the SONYMA Low Interest Rate Mortgage Program. The income limits are the same as those set by SONYMA for the Low Interest Rate Mortgage Program. (The income limits and property price maximum for the SONYMA Low Interest Rate Program are set for the particular county in question.)

Justification

There are many potential homeowners who find that the costs of buying and maintaining a home in New York State are far more than they can afford. As such many of these individuals choose to relocate out of state. Businesses in New York are having a difficult time competing for available employees. In order to assist in attracting new businesses, and employees for those businesses, a locality would have the option to make an exemption available for first-time homebuyers of pre-owned homes. A similar exemption is already permitted for first-time homebuyers of new homes.

Legislative history

S.1841, 2007-08; S.1395, 2005-06; S.6257, 2003-04.

Fiscal implications

None to the State.

Local fiscal implications

To be determined by the locality. Localities have the option whether they would like to provide this exemption and to what extent.

Effective date

This act shall take effect immediately.