Sponsored by:
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
Establishes New Jersey Homebuyer Tax Credit Program under gross income tax for certain home purchases during qualified periods by first-time homebuyers.
CURRENT VERSION OF TEXT
As introduced.
An Act establishing a New Jersey Homebuyer Tax Credit Program under the gross income tax for certain home purchases during qualified periods, supplementing chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A first-time homebuyer taxpayer shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a qualified home purchase, in an amount equal to five percent of the price paid for the purchase or $15,000, whichever is less, and subject to the further limitations imposed by this section; provided, however, that the taxpayer intends to use the home as the taxpayer s principal residence for 36 consecutive months next following the date of the qualified home purchase.
b. The amount of all credits allowed pursuant to this section shall not exceed $100,000,000, to be allocated over four terms as follows:
(1) up to $25,000,000 for contracts of sale executed on or before the 365th day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill); and
(2) up to $25,000,000 for contracts of sale executed after the 365th, but before the 730th, day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
(3) Upon a joint resolution adopted by the Senate and General Assembly and signed by the Governor that extends the tax credit program, as prescribed by subsection g. of this section, the balance of credits allowed pursuant to an extension of the tax credit program shall be allocated as follows:
(a) up to $25,000,000 for contracts of sale executed on or before the 365th day next following the date the Governor signs the joint resolution; and
(b) up to $25,000,000 for contracts of sale executed after the 365th, but before the 730th, day next following the date the Governor signs the joint resolution.
(4) For each term in which credits are allowed pursuant to this subsection, up to $18,750,000 shall be allowed for qualified home purchases of new qualified residential properties, and up to $6,250,000 shall be allowed for qualified home purchases of qualified residential properties previously occupied as a residence.
c. The director shall establish a convenient method, which may include an Internet or other electronic format, for first-time homebuyer taxpayers to apply for a determination of their preliminary eligibility to claim a credit, which determination shall be provided by the director to the taxpayer before the taxpayer s intended purchase date. Notice of the director s determination of preliminary eligibility or denial of preliminary eligibility to claim a credit shall be provided to applicants in the order in which the director receives the applications, and the limits provided in this subsection shall be allocated to applications in the order in which they are received and approved by the director. No credit shall be allowed under this section for a home purchase if a determination of preliminary eligibility of that home purchase is not provided by the director. The application shall include such information as the director determines is necessary to make a prompt determination of preliminary eligibility and shall include, but may not be limited to: (1) the taxpayer s certification of intention to use the home as the taxpayer s principal residence for 36 consecutive months after the qualified home purchase; and (2) in the case of a qualified home purchase of a new qualified residential property, the home seller s certification that the new qualified residential property has never been occupied as a principal residence.
d. (1) A first-time homebuyer taxpayer completing a qualified home purchase of a qualified residential property previously occupied as a residence within 365 days following the date of the execution of the contract of sale may claim a credit allowed pursuant to this section. To reserve a credit, the taxpayer and seller shall jointly sign and submit to the director a certification that they have entered into a fully executed contract of sale. Upon receipt of the certification, the director shall notify the taxpayer that the division has reserved the credit for the taxpayer, pending the director s receipt from the taxpayer, within 14 calendar days of settlement, of the Closing Disclosure for the qualified home purchase of a qualified residential property previously occupied as a residence.
(2) A first-time homebuyer taxpayer completing a qualified home purchase of a new qualified residential property within 545 days following the date of the execution of the contract of sale may claim a credit allowed pursuant to this section. To reserve a credit, the taxpayer and seller shall jointly sign and submit to the director a certification that they have entered into a fully executed contract of sale. Upon receipt of the certification, the director shall notify the taxpayer that the division has reserved the credit for the taxpayer, pending the director s receipt from the taxpayer, within 14 calendar days of settlement, of the Closing Disclosure for the qualified home purchase of a new qualified residential property.
e. The total amount of the credit allowed shall be divided and applied in equal amounts for three consecutive taxable years, beginning in the taxable year of the purchase and continuing in the next two taxable years. The amount of the credit allowed shall be applied against the tax otherwise due under N.J.S.54A:1-1 et seq. in each taxable year after all other credits and payments allowed in the taxable year. If the credit allowed reduces the tax liability otherwise due to zero, any amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment of tax pursuant to N.J.S.54A:9-7, provided however, subsection (f) of that section, concerning the allowance of interest, shall not apply. The director shall determine the form and manner by which a first-time homebuyer taxpayer shall apply for and be eligible to receive a refund of an overpayment pursuant this section.
f. (1) A taxpayer shall be required to repay the amount of all credits applied upon a determination by the director that a credit applied for and claimed against tax otherwise due, or for which a refund of tax is paid, does not meet the requirements of this section, including but not