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A09710 Summary:

Add 421-p, RPT L
Enacts the "homebuyer renovation property tax exemption act" to grant an exemption of up to fifteen thousand dollars from taxation levied by or on behalf of any county, city, town, village or school district in which such residential property is located for a period of five years from the date of purchase of the property; defines "primary residential property".
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A09710 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Fitzpatrick
  TITLE OF BILL: An act to amend the real property tax law, in relation to enacting the "homebuyer renovation property tax exemption act"   PURPOSE OR GENERAL IDEA OF BILL: To exempt homebuyers who complete reconstruction, alterations, or improvements of $15,000 or more from increases in property tax resulting from increased assessment value for a period of five years following the purchase of the home.   SUMMARY OF SPECIFIC PROVISIONS: Sections 1: Establishes that this act shall be known as the "homebuyer renovation property tax exemption act." Section 2: Legislative findings Section 3: Amends the real property tax law by adding a new section 421-p. This section exempts homebuyers who complete reconstruction, alteration, or improvements valued at $15,000 or more as part of a writ- ten contract for the sale of a primary residential property, or who enter a written contract within one hundred eighty days after closing of the sale of a primary residence for reconstruction, alteration, or improvements, from certain property taxes. This exemption will apply only to the increase in assessed value which is attributable to the reconstruction, alteration, or improvement. This section clarifies that the purchase and installation of appliances does not constitute an improvement. It also establishes that the tax exemption will be discon- tinued if any portion of a single family primary residential property is leased or if the primary residential property ceases to be used primari- ly for residential purposes. Section 4: Directs the Commissioner of Taxation and Finance to promul- gate rules and regulations necessary to implement the provisions of this act. Section 5: Provides for an effective date of January 1, 2025.   JUSTIFICATION: It is widely acknowledged that New York State is facing a severe short- age of housing. At the " same time, many properties in New York State remain vacant, abandoned, or underutilized. Bringing this additional housing online would provide additional housing options for New Yorkers and would be a step towards addressing New York's current housing crisis. However, current market conditions make reconstruction, renovations, and alterations to currently dilapidated or outdated housing increasingly expensive. Due to inflation, supply chain issues and government poli- cies, material and labor costs continue to rise, and construction costs are projected to increase an additional three to six percent by the end of 2024. These costs can often prevent homebuyers from purchasing prop- erties which will require major renovation or alteration, leaving these properties vacant. This legislation would offset rising costs associated with recon- struction, renovations, and alterations by providing tax relief to home- buyers who begin reconstruction, renovations, or alterations valued at $15,000 or more, either as a part of a written contract for the sale of a primary residence or through a written contract entered into within one hundred eighty days after closing of the sale of a primary resi- dence. This tax relief will incentivize homebuyers to make significant improvements to the current housing stock and bring currently vacant or outdated homes back online. Homebuyers who qualify for this tax exemption will be exempt from increases in local taxes based on an increase in the property assessment which is attributable to the reconstruction, alteration, or improvement. The exemption will last for a period of five years following the purchase of the home. This provides a tax incentive for homebuyers making major improvements while also preventing decreases in funding for local governments and school districts, as the homebuyer will still be responsible for all taxes based on the assessed value prior to recon- struction, renovation, or alteration as well as any special ad valorem levies.   PRIOR LEGISLATIVE HISTORY: new Bill   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect immediately.
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