Creates a homeownership rehabilitation credit

Title of bill

An act to amend the tax law, in relation to establishing a homeownership rehabilitation credit

Purpose

Encourages the redevelopment of neighborhoods in New York State.

Summary of provisions

This bill creates a tax credit for qualified home rehabilitation expenses. Under the legislation taxpayers in defined neighborhoods are eligible to receive a credit of fifteen percent for expenses that exceed five thousand dollars and are chargeable to a capital account. In order to be eligible for the credit the rehabilitated residence must be located in a census tract where 70% or more of the families have income that is less than 80% of the greater area or statewide median income, in a rural area defined by the Federal Housing Act, in an area of economic distress defined by the Internal Revenue Code or a reservation for a federally recognized Indian tribe.

Justification

New York State faces a serious housing situation with its aging housing stock. The percentage of housing stock over 40 years old in the United States is 34%. However, in New York State the percentage of housing stock over 40 years of age is 57%. Further, over 80% of the housing stock in upstate New York exceeds over 40 years of age. In most instances, the aging housing stock is located in areas that never experienced significant increases in home values and equity and as a result many of the homes remain in need of renovation. There is no incentive to improve this housing stock.

This legislation would help address the aging housing stock problem and restore older neighborhoods in New York. Creating this incentive will encourage property investment and help to revitalize these neighborhoods. Further, this legislation will provide increased opportunities for homeownership for New York's families.

Legislative history

2007-08: S.1968 2005-06: S.2988C/A.11777

Fiscal implications

To be determined.

Effective date

January 1st following enactment of this legislation.