Substitute House Bill No. 5979 proposes significant tax exemptions for public housing authorities by amending existing laws related to the real estate conveyance tax and the controlling interest transfer tax. Specifically, the bill introduces new legal language in Section 1, amending Section 12-498 of the general statutes to exempt deeds made to public housing authorities and repealing certain existing provisions. It also adds exemptions for deeds exchanged between spouses and modifies current exemptions for nonprofit organizations and affordable housing. In Section 2, the bill further clarifies that the tax on the sale or transfer of controlling interests in entities with real property interests will not apply to transactions involving public housing authorities, alongside existing exemptions for enterprise zones and ownership changes without a shift in beneficial ownership.

The effective date for these changes is set for July 1, 2025, applying to all relevant transactions occurring on or after that date. The fiscal implications of the bill are considerable, with an estimated General Fund revenue loss of approximately $2.2 million annually starting in fiscal year 2026. Municipalities will also face revenue losses due to the exemption from both the municipal real estate conveyance tax and the controlling interest transfer tax, which typically includes a portion remitted to local governments. Overall, while the bill aims to alleviate the tax burdens on public housing authorities, it poses significant financial challenges for state and local revenues.

Statutes affected:
Committee Bill: 12-498, 12-638b
FIN Joint Favorable: 12-498, 12-638b
File No. 855: 12-498, 12-638b