The proposed bill, Substitute House Bill No. 5284, allows municipalities in Connecticut to adopt an ordinance that provides property tax abatement for certain first-time homebuyers. Specifically, municipalities can offer an abatement of up to $500 per year for a maximum of five assessment years. To qualify for this abatement, the homebuyer must have purchased the residential property using funds from the Connecticut Housing Finance Authority (CHFA) and the property must be secured by a mortgage financed by CHFA. The ordinance must be approved by the municipality's legislative body or, in towns with a town meeting structure, by the board of selectmen. The bill defines "residential property" as a single-family dwelling that serves as the owner's principal residence.

The bill is set to take effect on October 1, 2026, and will apply to assessment years commencing on or after that date. It is anticipated that the implementation of this abatement could lead to a potential revenue loss for municipalities, with an estimated cumulative loss of approximately $15.09 million annually if all municipalities opt to provide the maximum abatement. However, the actual revenue loss will vary based on the number of municipalities that choose to implement the abatement and the number of eligible homeowners, which is estimated to be around 30,180 statewide.