Senate Bill No. 939, identified as File No. 665, is a legislative proposal that allows municipalities in Connecticut to offer a property tax abatement to certain first-time homebuyers. The bill permits municipalities to abate up to $500 per assessment year for no more than five years on the real property taxes of residential properties. These properties must be owned by individuals who purchased their homes with funds provided by the Connecticut Housing Finance Authority (CHFA) and are encumbered by a mortgage in favor of CHFA. The term "residential property" is defined within the bill as a single-family residential dwelling that serves 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, for the abatement to be implemented.

The bill is set to be effective from October 1, 2023, and is applicable to assessment years commencing on or after that date. The fiscal impact statement indicates that there is no state impact, but there is a potential municipal impact, with a potential revenue loss beginning in FY 24 for municipalities that choose to offer the tax 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 with the specified type of CHFA mortgage, and if all municipalities implemented the maximum $500 abatement, the cumulative annual revenue loss could be around $12.3 million. The ongoing fiscal impact would continue into the future based on the number of municipalities offering the abatement, the abatement amount, and the number of eligible CHFA first-time homebuyers.