BILL NUMBER: S852
SPONSOR: HELMING
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to enacting the
"homebuyer renovation property tax exemption act"
 
PURPOSE OR GENERAL IDEA OF BILL:
To exempt homebuyers who complete reconstruction, alterations, or
improvements of $15,000 or more from increases in property tax resulting
from increased assessment value for a period of five years following the
purchase of the home.
 
SUMMARY OF SPECIFIC PROVISIONS:
Sections 1: Establishes that this act shall be known as the "homebuyer
renovation property tax exemption act."
Section 2: Legislative findings
Section 3: Amends the real property tax law by adding a new section
421-r. This section exempts homebuyers who complete reconstruction,
alteration, or improvements valued at $15,000 or more as part of a writ-
ten contract for the sale of a primary residential property, or who
enter a written contract within one hundred eighty days after closing of
the sale of a primary residence for reconstruction, alteration, or
improvements, from certain property taxes. This exemption will apply
only to the increase in assessed value which is attributable to the
reconstruction, alteration, or improvement. This section clarifies that
the purchase and installation of appliances does not constitute an
improvement. It also establishes that the tax exemption will be discon-
tinued if any portion of a single family primary residential property is
leased or if the primary residential property ceases to be used primari-
ly for residential purposes.
Section 4: Directs the Commissioner of Taxation and Finance to promul-
gate rules and regulations necessary to implement the provisions of this
act.
Section 5: Provides for an effective date of January 1, 2026.
 
JUSTIFICATION:
It is widely acknowledged that New York State is facing a severe short-
age of housing. At the same time, many properties in New York State
remain vacant, abandoned, or underutilized. Bringing this additional
housing online would provide additional housing options for New Yorkers
and would be a step towards addressing New York's current housing
crisis.
However, current market conditions make reconstruction, renovations, and
alterations to currently dilapidated or outdated housing increasingly
expensive. Due to inflation, supply chain issues and government poli-
cies, material and labor costs continue to rise, and construction costs
are projected to increase an additional three to six percent by the end
of 2024. These costs can often prevent homebuyers from purchasing prop-
erties which will require major renovation or alteration, leaving these
properties vacant.
This legislation would offset rising costs associated with recon-
struction, renovations, and alterations by providing tax relief to home-
buyers who begin reconstruction, renovations, or alterations valued at
$15,000 or more, either as a part of a written contract for the sale of
a primary residence or through a written contract entered into within
one hundred eighty days after closing of the sale of a primary resi-
dence. This tax relief will incentivize homebuyers to make significant
improvements to the current housing stock and bring currently vacant or
outdated homes back online.
Homebuyers who qualify for this tax exemption will be exempt from
increases in local taxes based on an increase in the property assessment
which is attributable to the reconstruction, alteration, or improvement.
The exemption will last for a period of five years following the
purchase of the home. This provides a tax incentive for homebuyers
making major improvements while also preventing decreases in funding for
local governments and school districts, as the homebuyer will still be
responsible for all taxes based on the assessed value prior to recon-
struction, renovation, or alteration as well as any special ad valorem
levies.
 
PRIOR LEGISLATIVE HISTORY:
2024: S.8838 reported from Housing, Construction and Community Develop-
ment and committed to Finance/A.9710 referred to Real Property Taxation
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect on January 1, 2026.