BILL NUMBER: S1157
SPONSOR: COONEY
 
TITLE OF BILL:
An act to amend the private housing finance law, in relation to estab-
lishing the New York state first home savings program, which authorizes
first time home buyers to establish savings accounts to purchase a home;
and to amend the tax law, in relation to establishing a personal income
tax deduction for deposits into such accounts
 
PURPOSE:
Establishes the New York State First Home Buyers Savings Program to
authorize first time homebuyers to establish savings accounts to buy
their first home.
 
SUMMARY OF PROVISIONS:
Section 1- adds a new Article 28 to the Private Housing Finance Law to
create the New York State First Home Savings Program to incentivize
residents to save for the purchase of a first home in the State. A first
time home can be the purchase or construction of a house, townhouse,
condominium, or unit in a cooperative housing corporation within the
State to be used as a primary residence of the individual for not less
than two years after purchase, or construction.
The New York State Comptroller and Commissioner of the Department of
Taxation and Finance shall develop and implement the program in a manner
consistent with the provisions of this article through rules and regu-
lations. The Comptroller is responsible for entering into contracts with
financial organizations to allow for holding and investments associated
with this program. Contributions to first home savings accounts shall be
limited to $100,000 per account.
A New York First Time Home Savings account may not be used for business,
a vacation home, or as an investment, except an owner occupied multiple
dwelling with no more than two rental units. Monies withdrawn from a New
York First Home Savings account and any interest, which has accrued,
shall not be considered as income to the individual and taxed as such if
the monies are applied for the purchase, or construction of a qualified
first home purchase.
Section 2 - amends subsection (b) of section 612 of the tax law by
adding a new paragraph 42 to provide the amount that may be subtracted
from federal adjusted gross income pursuant to subsection (c) of this
section.
Section 3 - amends subsection (c) of section 612 of the tax law to add
two new paragraphs 42 and 43 to provide that an account owner shall be
able to deduct annually from his or her federal adjusted gross income an
amount, not to exceed five thousand dollars ($10,000 if married and
filing jointly), deposited into a New York State First Home Savings
account.
Section 4 - sets forth the effective date.
 
EXISTING LAW:
From the First Time Homebuyer Tax-Advantaged Savings Account Report
February 15, 2019:
"In June 2017, the New York State Legislature passed a bill establishing
the New York State first home savings program (A5616-B/S4058-8). The
bill was delivered to the Governor for his consideration in December
2017. The Governor agreed to sign the bill (Chapter 472 of 2017) pursu-
ant to a Chapter Amendment that, when enacted, would repeal the original
statute and require DHCR, in consultation with DTF and the SONYMA, to
study opportunities for, and implications of, a tax-advantaged savings 3
account program for first time home buyers. This agreement was subse-
quently included in legislation passed by both houses of the Legisla-
ture, and signed by the Governor in December 2018 (Chapter 379 of the
Laws of 2018), which also repeals the program first enacted into law in
2017. The Chapter Amendment (Chapter 379) specifically requires DHCR, in
consultation with DTF and SONYMA, to study opportunities for, and impli-
cations of, a tax-advantaged first home savings program. The legislation
requires that such study includes the feasibility, sustainability of
such a program, including the merits of income limitations, challenges
faced by first time homebuyers, first time homebuyer programs utilized
by other states, as well as the fiscal and economic impacts of such a
program, among other things."
 
JUSTIFICATION:
Buying a home for the first time can leave you with serious sticker
shock, and many New Yorkers can never imagine the reaching the dream of
home ownership. The New York State First Home Savings Program will allow
persons who have not had an ownership interest in a principal residence
to establish an account for the purchase of their first home, using a
deduction against their personal income taxes of up to five thousand
dollars for individuals and ten thousand dollars for married couples.
 
LEGISLATIVE HISTORY:
S.6574/A.6933: Reported and committed to Senate Finance
05/12/22 REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
 
FISCAL IMPLICATIONS:
According to the report for a 50% participation rate:
The Office of Tax Policy Analysis within DTF estimates that a state
tax-advantaged program would cause immediate and increasing reductions
in state revenues. If the program provided only a deduction for contrib-
utions to a first time homebuyer's savings account, in state fiscal year
(SFY) 2019- 20, direct state revenues could be reduced by some $3.1
million. These reductions would increase to $13. 9 million in SFY
202021, and $20.5 million in SFY 2021-22. If a refundable tax credit
were included in the program, the costs would increase significantly.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law, and shall apply to taxable years commencing on
or after the first of January next succeeding the date on which it shall
have become law; provided, however, that effective immediately, the
commissioner of taxation and finance and the comptroller are authorized
and directed to promulgate any rules or regulations necessary to imple-
ment the provisions of this act on its effective date on or before such
date.

Statutes affected:
S1157: 612 tax law, 612(b) tax law, 612(c) tax law