SB 939 — AN ACT CONCERNING PROPERTY TAX ABATEMENT FOR CERTAIN FIRST-TIME HOME BUYERS.

Senate General Assembly RaisedFile Bill No.

939665 January Session, 2023 LCOSenate Bill No.

3430939 ReferredSenate, toMay 1, 2023 The Committee on HOUSINGFinance, IntroducedRevenue by:and Bonding reported through SEN.

(HSG)FONFARA ANof ACTthe CONCERNING1st PROPERTYDist., TAXChairperson ABATEMENTof FORthe CERTAINCommittee FIRST-TIMEon HOMEthe BUYERS.part of the Senate, that the bill ought to pass.

AN ACT CONCERNING PROPERTY TAX ABATEMENT FOR CERTAIN FIRST-TIME HOME BUYERS.

(NEW) (Effective October 1, 2023, and applicable to assessment years commencing on or after October 1,1,2023) 2023) Any municipality may,may,upon upon approval by its legislative body or, in any town in which the legislative body is a town meeting, by the board of selectmen, abate by not more than five hundred dollars per assessment year, for no longer than five assessment years, the real property taxes due upon a residential property owned by a person who purchased such property with funds provided to qualified first-time homebuyers by the Connecticut Housing Finance Authority and which property is encumbered by a mortgage in favor of the Connecticut Housing Finance Authority.

For thethepurposesofthissection,"residentialproperty"meansasingle-family purposes of this section, "residential property" means a single-family residential dwelling that is the principal residence of the owner of such property.

ThisSB939 act/ shallFile takeNo. effect as follows and shall amend the following sections:

LCO665 34301 \\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-00939-R01SB939 ofFile 2 SB.docx Bill No.

939665 SectionThis 1act Octobershall 1,take 2023,effect andas Newfollows sectionand applicableshall toamend assessmentthe yearsfollowing commencingsections: on or after October 1, 2023 HSG Joint Favorable C/R FIN FIN Joint Favorable LCO 3430 R02-SB.docx }COUSERS\FORZANOF\WS\2023SB-00939- 2 of 2

Section 1 October 1, 2023, and New section applicable to assessment years commencing on or after October 1, 2023 HSG Joint Favorable C/R FIN FIN Joint Favorable SB939 / File No.

665 2 SB939 File No.

665 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

Municipalities Effect FY 24 $ FY 25 $ Various Municipalities Potential See Below See Below Revenue Loss Explanation The bill results in a potential revenue loss beginning in FY 24 to any municipality that chooses to abate up to $500 in property taxes, for up to five years, for homeowners with a first-time home buyer mortgage purchased via the Connecticut Housing Finance Authority (CHFA).

The revenue lossfor eachmunicipality willvary based ontheamount oftheabatement andthenumber ofeligible homeowners.It isestimated that there are approximately 24,600 homeowners across the state with the specified type of CHFA mortgage .

If all municipalities implemented a maximum $500 abatement, the revenue loss cumulatively to allmunicipalitieswouldbeapproximately$12.3million annually.

If any municipality chooses not to offer the abatement, it will have no revenue loss associated with the bill, and the total revenue loss among municipalities will be lower.

1CHFA has 24,601 outstanding first-time home buyer mortgages as of December 31, and it is assumed that each of those people would be eligible for the abatement established by the bill if their municipality chose to offer it.

SB939 / File No.

665 3 SB939 File No.

665 The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of municipalities that implement the abatement, the amount of the abatement, and the number of CHFA first-time homebuyers in such municipalities.

SB939 / File No.

665 4 SB939 File No.

665 OLR Bill Analysis SB 939 AN ACT CONCERNING PROPERTY TAX ABATEMENT FOR CERTAIN FIRST-TIME HOME BUYERS.

SUMMARY This bill allows municipalities to abate up to $500 in property taxes per assessment year for a residential property (1) owned by someone who purchased it witha Connecticut Housing Finance Authority-issued mortgage for qualified first-time homebuyers and (2) that is encumbered by this mortgage.

The abatement can last a maximum of five assessment years and must be approved by the municipality’s legislative body or, in a town in which the legislative body is a town meeting, by the board of selectmen.

Under the bill, a residential property is a single-family residential dwelling that is the owner’s principal residence.

EFFECTIVE DATE:

October 1, 2023, and applicable to assessment years beginning on or after that date.

BACKGROUND Related Bill HB 6558 (File No.

129), reported favorably by the Planning and Development Committee, contains nearly identical provisions.

COMMITTEE ACTION Housing Committee Joint Favorable Change of Reference - FIN Yea 15 Nay 1 (03/07/2023) Finance, Revenue and Bonding Committee Joint Favorable Yea 51 Nay 0 (04/18/2023) SB939 / File No.

665 5