The bill under consideration, identified as Substitute House Bill No. 5516 (File No. 565), proposes to grant municipalities the option to provide a property tax exemption for certain owner-occupied residences. This exemption can range from a minimum of five percent to a maximum of thirty-five percent of the assessed value of the property. The properties eligible for this exemption include single-family homes, duplexes, condominiums, and units in a common interest community, provided they are the primary residence of the owner and consist of no more than two units. The bill requires approval by the municipality's legislative body or, in cases where the legislative body is a town meeting, by the board of selectmen, to implement this exemption.

The fiscal impact statement attached to the bill indicates that there is no state impact, but there could be a municipal impact starting in fiscal year 2026. Municipalities that opt to provide this exemption would see a reduction in their grand list, which could potentially affect revenue. However, the actual impact would depend on the percentage of the assessed value that is exempted and the number of qualifying properties within each municipality. It is noted that municipalities may adjust their mill rate to offset any predicted revenue loss. The bill is effective upon passage and has received a Joint Favorable Substitute recommendation from the Finance, Revenue and Bonding Committee with a unanimous vote in favor.