House Bill No. 5167, reported by the Committee on Planning and Development, proposes an act concerning property tax abatement for certain first-time homebuyers. The bill allows municipalities, upon approval by their legislative body or the board of selectmen in towns with town meetings, to abate up to $500 of the real property taxes for up to five assessment years on residential properties owned by individuals who purchased their homes with funds provided by the Connecticut Housing Finance Authority (CHFA). The property must be the principal residence of the owner and encumbered by a mortgage in favor of the CHFA. This bill is identified as File No. 35 and would be effective from October 1, 2024, applicable to assessment years commencing on or after that date.
The fiscal impact statement and bill analysis indicate that there would be no state impact, but there could be a potential revenue loss for municipalities that choose to implement the tax abatement. The revenue loss would vary depending on the number of eligible homeowners and the amount of the abatement. It is estimated that there are approximately 26,400 homeowners with the specific type of CHFA mortgage across the state. If all municipalities implemented the maximum $500 abatement, the cumulative annual revenue loss could be around $13.2 million. The ongoing fiscal impact would depend on the number of municipalities offering the abatement, the abatement amount, and the number of eligible CHFA first-time homebuyers in those municipalities.