Establishes a personal income tax credit for first time home buyers

Title of bill

An act to amend the tax law, in relation to providing for a personal income tax credit for resident taxpayers who are first time home buyers

Purpose

To establish a $5,000 personal income tax credit for first time home buyers.

Summary of provisions

Section 1 amends § 606 of the Tax Law by adding a new subsection establishing a first time home buyers' credit. The subsection provides, a resident taxpayer who is a first time home buyer, who purchases a qualifying primary residence in this state on or after January 1, 2016, and whose adjusted gross income does not exceed $100,000 for married resident taxpayers filing jointly or $50,000 for all other resident taxpayers, shall be allowed a credit against the tax imposed by this article.

Section 2 provides the effective date.

Existing law

Article 22 of the Tax Law pertains to the personal income tax. Section 606 provides credits against tax. Currently law does not provide for a tax credit for first-time home buyers.

Justification

With the recent dramatic declines in the housing market and the ensuing freeze-up of the home mortgage business, more and more people are finding it difficult to purchase their first home. This condition results in an economic downturn that is further fueled by a corresponding reduction in sales for heating, air conditioning, electrical, plumbing and contractor supply houses. The ripple effect continues with an impact on durable goods sales such as furniture, washing machines and refrigerators. By providing a tax credit to first time home buyers purchasing qualifying residents, New York State encourages a new group of buyers to enter the market and stimulate the economy.

For the purposes of this credit, a "first time home buyer" is any individual or group of individuals who have purchased a qualifying primary residence where that individual or any individual within the group of individuals that have purchased such a residence has not owned, in whole or in part, a qualifying primary residence or other residential property within the five year period preceding the purchase. A "qualifying primary residence," is any one, two, or three-family home, townhouse, mobile home, or condominium that is located within the state and used primarily for residential purposed. The home must also be one purchased for fair market value, and the purchase price may not exceed $150,000 or the median home value for the county in which it is located, whichever is greater.

By providing first time home buyers with this credit New York State does much to promote its economy and encourage new residents to enter the housing market. For all of the aforementioned reasons it is imperative that this bill is enacted.

Legislative history

New bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately and shall apply to taxable years commencing on or after January 1, 2016.