NY State Senate Bill 2015-S6548

Senate Bill S6548

2015-2016 Legislative Session

Authorizes an income tax deduction of monies deposited into a house, townhouse, condominium or unit in a cooperative housing corporation account

download bill text pdf

Archive: Last Bill Status - Stricken

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 17, 2016	recommit, enacting clause stricken
Jan 25, 2016	referred to investigations and government operations

2015-S6548 (ACTIVE) - Details

See Assembly Version of this Bill:: A4427
Law Section:: Tax Law
Laws Affected:: Amd §612, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A4193
2011-2012: A3833
2013-2014: A6143
2017-2018: A5616

2015-S6548 (ACTIVE) - Summary

Provides for the establishment of a home purchase account; enables first time house, townhouse, condominium or unit in a cooperative housing corporation purchasers to deposit monies into an account established at a banking institution and be able to take a tax deduction for the amount deposited, not exceeding $5,000 for an individual and $10,000 for a couple; provides withdrawal of the monies in the fund will not make an individual liable to income tax if such monies are applied toward the purchase of a house, townhouse, condominium or unit in a cooperative housing corporation or the construction of a house, townhouse, condominium or unit in a cooperative housing corporation; provides that inappropriate application of fund monies shall cause the individual to be liable for income tax and be penalized.

2015-S6548 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6548

 TITLE OF BILL :  An act to amend the tax law, in relation to
establishing a first time home buyer income tax deduction for monies
deposited into a house, townhouse, condominium or unit in a
cooperative housing corporation purchase account and providing for
penalties for unauthorized withdrawals from such an account

 PURPOSE :  To provide for future homebuyers a special savings account
and deduction similar to an individual retirement account that may be
used for the purchase of a first home.

 JUSTIFICATION :  Home ownership, has long been recognized as a part
of the "Great American Dream". However, real estate values in New York
State make the purchase of a first home extremely difficult for young
people and others who have yet to buy a first home.

The first-time homebuyers' account will allow persons who have not had
an ownership interest in a principal residence to establish an account
for the purchase of a home, using a deduction from personal income of
up to five thousand dollars for individuals and ten thousand dollars
for married couples.

The lack of affordable housing is causing an exodus of young people
who are moving from New York to states with lower housing market
values. In addition to an easing of the exodus, this legislation will

help stimulate the construction industry by increasing the long-term
demand for individual housing units, townhouses, condominiums and
cooperative housing units and thereby create jobs. This is important
because it has long been recognized that the building industry is the
engine that drives the state's economy. Unfortunately, the engine is
sputtering as evidenced by a 24% decline in single family housing
starts in New York State from 1995 to 1996 as compared to the national
average which showed an increase of 8% for the same period.

This legislation will also encourage savings by those who have not yet
purchased homes but who plan to do so.

 PRIOR LEGISLATIVE HISTORY :

Senate 2016-This is a New Bill

Assembly A.6143 of 2013-14 referred to ways and means A.3715 of
2011-12 referred to education A.4662 of 2009-10 referred to education
A.4203 of 2007-08 referred to education A.5327 of 2005-06 referred to
education A.9876 of 2004 referred to education

 FISCAL IMPLICATIONS :  The Tax Department estimates that, if this
bill were enacted into law, it would result in a $3 million revenue
loss during the first SFY and a $11 million annual loss in subsequent
fiscal years. However, it is estimated that each new home (avg. cost
$125,000) sale generates approximately $95,000 in related economic
activity. Even if the establishment of the first-time homebuyers'
account increased home sales by only 4% annually, or 6,600 new homes
per year, an additional $627 million in related economic activity
would occur. Taxed at a rate of 10, this activity would generate
$62.70 million in personal and business tax revenues to the state. The
result would be an increase in state revenues, not to mention the
creation of more jobs, due to the homebuyers' account credit.
Moreover, it is estimated that a 4% increase in the construction of
new homes in New York will generate approximately $76.23 million in
local taxes.

Also, the increase in sales for pre-existing homes generated by this
legislation will increase state revenues through the state's real
property transfer tax mechanisms.
 EFFECTIVE DATE :  This act shall take effect on the 120th day after
it shall have become a law and shall apply to all taxable years
commencing on or after January 1 of the year next succeeding the year
in which it shall have become a law; provided, however, that paragraph
6 of subsection (w) of section 612 of the tax law, as added by section
two of this act, shall take effect immediately.

2015-S6548 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6548

                            I N  S E N A T E

                            January 25, 2016
                               ___________

Introduced by Sen. PANEPINTO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN  ACT  to  amend the tax law, in relation to establishing a first time
  home buyer income tax deduction for monies  deposited  into  a  house,
  townhouse,  condominium  or  unit in a cooperative housing corporation
  purchase account and providing for penalties  for  unauthorized  with-
  drawals from such an account

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1.  Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 44 to read as follows:
  (44) THE AMOUNT THAT MAY BE SUBTRACTED  FROM  FEDERAL  ADJUSTED  GROSS
INCOME PURSUANT TO SUBSECTION (W) OF THIS SECTION.
  S  2. Section 612 of the tax law is amended by adding a new subsection
(w) to read as follows:
  (W) DEDUCTIONS FOR MONIES DEPOSITED INTO A HOUSE, TOWNHOUSE, CONDOMIN-
IUM OR UNIT IN A COOPERATIVE CORPORATION PURCHASE ACCOUNT.  (1) AN INDI-
VIDUAL AS A FIRST TIME HOME BUYER SHALL BE ENTITLED TO  DEDUCT  ANNUALLY
FROM HIS OR HER FEDERAL ADJUSTED GROSS INCOME THAT AMOUNT, NOT TO EXCEED
FIVE  THOUSAND  DOLLARS,  DEPOSITED  INTO A HOUSE PURCHASE ACCOUNT.   AN
INDIVIDUAL AND HIS OR HER SPOUSE SHALL JOINTLY BE ENTITLED TO A  MAXIMUM
DEDUCTION  OF  TEN  THOUSAND  DOLLARS. THIS AMOUNT MAY BE DIVIDED IN ANY
MANNER AS THE PARTIES DESIRE FOR INCOME TAX PURPOSES.
  (2) (A) FOR THE PURPOSES OF THIS SUBSECTION, A "FIRST TIME HOME BUYER"
SHALL MEAN AN INDIVIDUAL OR AN INDIVIDUAL AND HIS OR HER SPOUSE, NONE OF
WHOM HAS OR HAD AN OWNERSHIP INTEREST IN A PRINCIPAL  RESIDENCE  AT  ANY
TIME.    NO  SUCH PERSONS SHALL OWN ANY OTHER HOME INCLUDING VACATION OR
INVESTMENT RESIDENCES, EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION.
  (B) FOR THE PURPOSES OF THIS SUBSECTION, "OWNERSHIP INTEREST" INCLUDES
THE FOLLOWING: A FEE SIMPLE INTEREST, A  JOINT  TENANCY,  A  TENANCY  IN
COMMON, A TENANCY BY THE ENTIRETY, THE INTEREST OF A TENANT-SHARE HOLDER
IN A COOPERATIVE, A LIFE ESTATE AND A LAND CONTRACT.  INTERESTS WHICH DO
NOT  CONSTITUTE OWNERSHIP INTERESTS INCLUDE THE FOLLOWING: (I) REMAINDER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD03869-03-6

S. 6548                             2

INTERESTS, (II) A LEASE WITH OR WITHOUT AN OPTION TO PURCHASE,  (III)  A
MERE EXPECTANCY TO INHERIT AN INTEREST IN A RESIDENCE, (IV) THE INTEREST
THAT  A PURCHASER OF A RESIDENCE ACQUIRES ON THE EXECUTION OF A PURCHASE
CONTRACT AND (V) AN INTEREST IN REAL ESTATE OTHER THAN A RESIDENCE.
  (C)  TO  ESTABLISH  THAT AN INDIVIDUAL IS A FIRST TIME HOME BUYER, THE
INDIVIDUAL SHALL COMPLETE A FORM PROMULGATED BY THE DEPARTMENT  CERTIFY-
ING,  UNDER  THE  PENALTIES  OF PERJURY, THAT SUCH INDIVIDUAL IS A FIRST
TIME HOME BUYER.
  (D) IN THE CASE OF AN INDIVIDUAL AND HIS OR HER SPOUSE, IF EITHER  THE
INDIVIDUAL  OR HIS OR HER SPOUSE IS NOT A FIRST TIME HOME BUYER, NEITHER
THE INDIVIDUAL NOR THE SPOUSE SHALL BE  CONSIDERED  A  FIRST  TIME  HOME
BUYER.
  (E)  IF  AN INDIVIDUAL'S ONLY POTENTIALLY DISQUALIFYING PRESENT OWNER-
SHIP INTEREST IS OWNERSHIP OF A MOBILE  HOME  THAT  IS  NOT  PERMANENTLY
ATTACHED TO THE LAND, THE INDIVIDUAL MAY BE CONSIDERED A FIRST TIME HOME
BUYER  AND  MAY  BE ELIGIBLE FOR A HOUSE PURCHASE ACCOUNT DEDUCTION. FOR
THE PURPOSES OF THIS SUBPARAGRAPH A "MOBILE HOME" SHALL MEAN A STRUCTURE
WHICH IS PERMANENTLY ATTACHED, BEING PERMANENTLY ANCHORED TO REAL  PROP-
ERTY  AND  HAS  HAD  WHEELS  AND OTHER COMPONENTS USED IN TRANSPORTATION
REMOVED. IF, DUE TO HIS OR HER OWNERSHIP OF A MOBILE HOME, THE  INDIVID-
UAL  HAS  CLAIMED A REAL ESTATE TAX OR HOME MORTGAGE DEDUCTION ON HIS OR
HER INCOME TAX RETURNS, SUCH INDIVIDUAL SHALL NOT BE CONSIDERED A  FIRST
TIME  HOME  BUYER  REGARDLESS OF WHETHER THE MOBILE HOME WAS PERMANENTLY
ATTACHED TO THE LAND.
  (F) AN INDIVIDUAL MUST NOT INTEND TO USE ANY PORTION OF THE REAL PROP-
ERTY PURCHASED USING THE HOUSE PURCHASE ACCOUNT  FUNDS  IN  A  TRADE  OR
BUSINESS,  OR AS A VACATION HOME OR AS AN INVESTMENT, EXCEPT AS AN OWNER
OCCUPIED MULTIPLE DWELLING WITH NO MORE THAN TWO RENTAL UNITS.
  (3) FOR PURPOSES OF THIS SUBSECTION A "HOUSE PURCHASE  ACCOUNT"  SHALL
MEAN  AN  ACCOUNT  ORGANIZED  OR CREATED IN THIS STATE FOR THE EXCLUSIVE
BENEFIT OF AN INDIVIDUAL AND HIS OR HER SPOUSE WHO IS A FIRST TIME HOME,
TOWNHOUSE, CONDOMINIUM OR UNIT  IN  A  COOPERATIVE  HOUSING  CORPORATION
PURCHASER  OR  INDIVIDUAL  WHO  HAS  CONTRACTED  WITH  A BUILDER FOR THE
CONSTRUCTION OF A PRINCIPAL RESIDENCE. EVERY SUCH ACCOUNT  SHALL  COMPLY
WITH THE FOLLOWING REQUIREMENTS:
  (A) THE ACCOUNT SHALL BE HELD IN A BANKING ORGANIZATION, AS DEFINED IN
SECTION  TWO  OF  THE  BANKING  LAW, NATIONAL BANKING ASSOCIATION, STATE
CHARTERED CREDIT UNION, FEDERAL MUTUAL SAVINGS BANK, FEDERAL SAVINGS AND
LOAN ASSOCIATION, OR FEDERAL CREDIT UNION AND SUCH  ACCOUNT  WAS  ESTAB-
LISHED PURSUANT TO THIS SUBSECTION.
  (B) ANY AMOUNT IN THE ACCOUNT IS NONFORFEITABLE.
  (C)  THE  FUNDS IN SUCH ACCOUNT SHALL NOT BE COMMINGLED WITH ANY OTHER
MONIES OF THE INDIVIDUAL BY THE TRUSTEE.
  (D) MONIES WITHDRAWN FROM SUCH ACCOUNT AND INTEREST WHICH HAS  ACCRUED
SHALL  NOT  BE  CONSIDERED  AS INCOME TO THE INDIVIDUAL AND TAXED IF THE
MONIES ARE APPLIED FOR THE PURCHASE OR CONSTRUCTION OF  A  HOUSE,  TOWN-
HOUSE,  CONDOMINIUM  OR  UNIT IN A COOPERATIVE HOUSING CORPORATION TO BE
USED AS A PRIMARY RESIDENCE OF THE INDIVIDUAL FOR A PERIOD OF  NOT  LESS
THAN TWO YEARS AFTER PURCHASE OR CONSTRUCTION.
  (4) WITHIN SIXTY DAYS AFTER WITHDRAWAL OF MONIES FROM A HOUSE PURCHASE
ACCOUNT,  AN  INDIVIDUAL  SHALL SUBMIT SATISFACTORY PROOF TO THE COMMIS-
SIONER, UPON FORMS PROVIDED BY THE DEPARTMENT, THAT THE MONIES WITHDRAWN
WERE USED FOR THE PURCHASE OR CONSTRUCTION OF A HOUSE, TOWNHOUSE, CONDO-
MINIUM OR UNIT IN A COOPERATIVE HOUSING CORPORATION. IN THE  EVENT  THAT
AN  INDIVIDUAL  WITHDRAWS ALL OR ANY PART OF THE MONIES FROM THE ACCOUNT
AND DOES NOT EITHER APPLY THE MONIES TO THE PURCHASE OR CONSTRUCTION  OF

S. 6548                             3

A  HOUSE, TOWNHOUSE, CONDOMINIUM OR UNIT IN A COOPERATIVE HOUSING CORPO-
RATION, OR FAILS TO SUBMIT TO THE COMMISSIONER  THE  PROOF  AS  REQUIRED
PURSUANT  TO  THIS  PARAGRAPH,  SUCH  INDIVIDUAL  SHALL  HAVE THE ENTIRE
ACCOUNT  TAXED,  INCLUDING  INTEREST WHICH HAS ACCRUED, AS THOUGH IT WAS
INCOME IN THE YEARS THAT THE MONIES FROM THE ACCOUNT WERE WITHDRAWN.  IN
THE EVENT THAT AN INDIVIDUAL DOES NOT USE THE HOUSE,  TOWNHOUSE,  CONDO-
MINIUM  OR  UNIT IN A COOPERATIVE HOUSING CORPORATION AS A PRIMARY RESI-
DENCE FOR A PERIOD OF NOT LESS THAN TWO  YEARS  AFTER  THE  PURCHASE  OR
CONSTRUCTION  SUCH  INDIVIDUAL  SHALL  HAVE  THE  ENTIRE  HOUSE PURCHASE
ACCOUNT TAXED, INCLUDING INTEREST WHICH HAS ACCRUED, AS  THOUGH  IT  WAS
INCOME IN THE YEAR THAT THE MONIES FROM THE ACCOUNT WERE WITHDRAWN.  FOR
THE  PURPOSES  OF THIS PARAGRAPH, THE TWO YEAR PERIOD SHALL BEGIN TO RUN
AT THE TIME TITLE TO THE HOUSE, TOWNHOUSE, CONDOMINIUM,  OR  UNIT  IN  A
COOPERATIVE HOUSING CORPORATION PASSES TO THE INDIVIDUAL.
  (5)  THE  COMMISSIONER  SHALL  ESTABLISH  A PENALTY OF TEN PERCENT FOR
THOSE HOUSE PURCHASE ACCOUNTS WHICH ARE TAXED IN ACCORDANCE  WITH  PARA-
GRAPH  FOUR OF THIS SUBSECTION.  THE PENALTY SHALL BE IN ADDITION TO THE
TAX DUE FOR THOSE FUNDS INAPPROPRIATELY APPLIED. SUCH PENALTY  SHALL  BE
WAIVED  BY  THE  COMMISSIONER  IF THE INDIVIDUAL CAN SHOW PROOF THAT THE
REASON THE INDIVIDUAL DID NOT USE THE HOUSE, TOWNHOUSE,  CONDOMINIUM  OR
UNIT  IN  A COOPERATIVE HOUSING CORPORATION AS A PRIMARY RESIDENCE FOR A
PERIOD OF TWO YEARS OR MORE AFTER THE PURCHASE OR CONSTRUCTION, WAS  DUE
TO EITHER:
  (A)  AN  EMPLOYMENT  RELOCATION  OUTSIDE THE STATE AND SUCH RELOCATION
REQUIRED THE INDIVIDUAL TO BECOME A RESIDENT OF ANOTHER STATE; OR
  (B) AN UNFORESEEABLE FINANCIAL EMERGENCY.
  FOR PURPOSES OF THIS PARAGRAPH, AN "UNFORESEEABLE FINANCIAL EMERGENCY"
SHALL MEAN A SEVERE FINANCIAL HARDSHIP TO THE INDIVIDUAL RESULTING  FROM
A  SUDDEN  AND  UNEXPECTED ILLNESS OR ACCIDENT OF THE INDIVIDUAL OR OF A
DEPENDENT.  THE CIRCUMSTANCES THAT CONSTITUTE AN UNFORESEEABLE EMERGENCY
WILL DEPEND UPON THE FACTS OF EACH CASE, HOWEVER,  WITHDRAWAL  OF  HOUSE
PURCHASE  ACCOUNT  FUNDS MAY NOT BE MADE, WITHOUT PENALTY, TO THE EXTENT
THAT SUCH HARDSHIP IS OR MAY BE RELIEVED BY EITHER:
  (I) REIMBURSEMENT OR COMPENSATION BY INSURANCE OR OTHERWISE; OR
  (II) LIQUIDATION OF THE INDIVIDUAL'S ASSETS, TO THE EXTENT THE  LIQUI-
DATION OF SUCH ASSETS WOULD NOT ITSELF CAUSE SEVERE FINANCIAL HARDSHIP.
  (6)  THE  COMMISSIONER  IS HEREBY DIRECTED TO PROMULGATE ALL RULES AND
REGULATIONS,  AFTER  CONSULTATION  WITH  THE  DEPARTMENT  OF   FINANCIAL
SERVICES,  NECESSARY  TO IMPLEMENT THE PROVISIONS OF THIS SUBSECTION AND
TO MAXIMIZE THE EFFECT OF THIS  SUBSECTION.  THE  COMMISSIONER  AND  THE
SUPERINTENDENT  OF  FINANCIAL  SERVICES ARE HEREBY DIRECTED TO COOPERATE
WITH EACH OTHER IN THE ESTABLISHMENT, SUPERVISION AND REGULATION OF  THE
INDIVIDUAL  HOUSE  PURCHASE  ACCOUNTS  AUTHORIZED  TO BE CREATED IN THIS
SUBSECTION.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law and shall apply to taxable  years  commencing
on  or after January first of the year next succeeding the year in which
it shall have become a  law;  provided  however,  that  paragraph  6  of
subsection (w) of section 612 of the tax law, as added by section two of
this act, shall take effect immediately.

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