Governor, Legislature Strike Deal on First-Time Homebuyer Tax Incentive
John Jordan | December 2017
ALBANY—New York State Gov. Andrew Cuomo citing the legislation’s potential costs, reached an agreement on Dec. 18 with the State Legislature to have three state agencies study the fiscal impacts of establishing the New York State First-Time Homebuyer Savings Program.
The governor signed the New York First Time Homebuyer Savings Program (NY First Home) bill that passed both the Assembly and Senate earlier this year, but issued a memorandum in conjunction with its approval that at the very least delays its implementation.
The legislation would have allowed individuals seeking to purchase their first home to establish a savings account and make annual tax-deductible contributions of up to $5,000 for an individual or head of household or $10,000 for married taxpayers who file taxes jointly. The bill put a cap on contributions of up to $100,000 for the purchase or construction of their primary residence.
“I fully support the intent of this bill, as the purchase of a first home is a significant milestone,” Gov. Cuomo stated in his memorandum to the bill. “As originally drafted, however, the bill raises significant technical and administrative concerns that would make it very difficult to implement.”
The governor stated that he had reached an agreement with the State Legislature to pass legislation in the upcoming session requiring the Division of Community Renewal, in consultation with the Department of Taxation and Finance and the State of New York Mortgage Authority to study “opportunities for, and implications of, a tax-advantaged first home savings program.”
The study, which is expected to be completed and its findings released on June 30, 2018, is to include a detailed review of the fiscal and economic impacts of the bill that was introduced by New York State Senator Betty Little (R-Glens Falls) and Assemblyman Philip Ramos (D-Brentwood).
While not cited in his memorandum, New York State lawmakers are grappling with an estimated budget deficit for 2018 of approximately $4 billion and potential “devastating” impacts of the recently enacted federal tax reform legislation
New York State Association of Realtors President Dawn M. Carpenter released a statement in response to the governor’s action that stressed NYSAR will work with state lawmakers and the Cuomo Administration on the development and implementation of a first-time homebuyer tax incentive.
“This program would be a significant step in helping New York State retain the talents and energy of families and individuals, who have been struggling to find a path to homeownership here. In 2016 New York State experienced its first population loss in a decade. A first-time homebuyer tax incentive would help New Yorkers set down roots in the Empire State instead of leaving, which will build neighborhoods and provide a boost to our state’s economy,” NYSAR’s Carpenter said.
In reference to the recently approved controversial federal tax reform bill, the NYSAR President praised state leaders for not letting the federal tax code bias against New York State consumers go unchecked. Carpenter closed her statement by thanking the bill’s sponsors and added, “The actions by our legislative leaders and the governor have helped make a statement that New York State is committed to building quality of life through homeownership.”
Hudson Gateway Association of Realtors Chief Executive Officer Richard Haggerty said, “While our preference would have been for the governor to sign the bill which passed the State Senate and the Assembly so that it could be implemented immediately, we are nonetheless pleased that Governor Cuomo and the State Legislature have agreed to work towards the development and implementation of a first-time homebuyer tax incentive.”
He added, “With the uncertainty created by the recent passage of the federal tax reform bill and the potential effects it will have on housing, a first-time homebuyer tax incentive will hopefully help prospective purchasers remain in New York and help boost our state’s economy.”
NYSAR President Duncan MacKenzie said that New York State Realtors should be proud for their advocacy that led to the passage of the NY First Home bill by both houses of the State Legislature in just 18 months, which he noted, “is remarkably fast when viewed through the lens of New York’s traditionally glacial lawmaking process.”