House Bill No. 6558, introduced in the January Session of 2023, proposes an act concerning property tax abatement for certain first-time home buyers. The bill allows municipalities to offer a property tax abatement of up to $500 for not more than five assessment years for residential properties owned by individuals who have purchased their homes with funds provided by the Connecticut Housing Finance Authority (CHFA) and whose properties are encumbered by a mortgage in favor of the CHFA. The abatement is applicable to single-family residential dwellings that serve as the principal residence of the owner. The bill requires approval by the municipality's legislative body or, in towns where the legislative body is a town meeting, by the board of selectmen. The bill is effective from October 1, 2023, and applies to assessment years commencing on or after that date.

The fiscal impact statement and bill analysis indicate that there is no state impact, but there is a potential revenue loss for municipalities that choose to implement the abatement. The revenue loss will vary depending on the number of eligible homeowners and the amount of the abatement. It is estimated that there are approximately 24,600 homeowners across the state with the specified type of CHFA mortgage. If all municipalities implemented a maximum $500 abatement, the cumulative annual revenue loss to all municipalities could be approximately $12.3 million. The ongoing fiscal impact will depend on the number of municipalities offering the abatement, the abatement amount, and the number of eligible CHFA first-time homebuyers in those municipalities. The bill has received a Joint Favorable report from the Planning and Development Committee.