State Senate Approves Legislation Creating New Jersey Home Buyer Tax Credit
On June 10, 2010, the New Jersey Senate approved A1678, legislation creating a home buyer tax credit program in New Jersey. This legislation was previously approved by the General Assembly and is now awaiting Governor Chris Christie's signature.
Since spring 2010, the New Jersey Association of REALTORS® (NJAR®) has discussed the possibility of the New Jersey Legislature passing a bill that creates a state tax credit program for home purchases. Recently legislation, A-1678/S-692, was approved by the General Assembly establishing a New Jersey Home Buyer Tax Credit Program under the state gross income tax for home purchases made within a one year period following enactment of the law. As a means of bolstering the Garden State’s faltering economy, the bill creates a refundable tax credit of up to $15,000, or 5 percent of a home purchase price (whichever is less) for qualified home buyers. If eligible for the credit, home purchasers will receive the credit over three years, during which time the home purchased must be used as a primary residence.
Under the current bill, $75 million in funding is set aside for the purchase of newly constructed homes and $25 million will go towards purchase of previously occupied homes. While NJAR® is working to have more money dedicated to the purchase of existing homes, the main focus of the bill is to put people in the building trades to work and stimulate the economy through income and sales tax revenue created by the new construction. NJAR® submitted a memo explaining the economic benefits associated with enacting a state home buyer tax credit and expanding it to include more existing homes.
Before this legislation can become law, it must be approved by the full state Senate and be signed by Governor Chris Christie. The full Senate may vote on the bill as early as its next scheduled meeting on June 10, 2010. To date, we have not received confirmation as to whether Governor Christie is inclined to support the legislation