The bill amends the Income Tax Act of 1967, specifically section 520, to update the criteria for claiming property tax credits for homesteads. It introduces a new eligibility threshold for the taxable value of a homestead, increasing the cap from $135,000 to $196,500, effective from the 2026 tax year. Additionally, the bill mandates that this cap will be adjusted annually based on the percentage increase in the United States House Price Index. The language also clarifies that the property taxes used for credit computation must not exceed the amount levied for one tax year and specifies that the credit must be computed based on the gross rent paid by claimants who rent or lease a homestead.

Furthermore, the bill revises the definitions and terms used throughout the section, replacing terms like "person" with "claimant" for clarity. It also establishes new rules for senior citizens regarding the credit they can claim based on their total household resources and rent paid. The maximum credit allowed is increased from $1,200 to $1,500 per year, with provisions for future adjustments based on the Consumer Price Index. The bill aims to provide more equitable tax relief for homeowners and renters while ensuring that the criteria for eligibility and credit calculations are clearly defined.

Statutes affected:
House Introduced Bill: 206.520