Provides for personal income taxpayers who are first-time home buyers a credit for interest paid on a purchase money loan/mortgage of 25% of the annual interest paid over the life of the loan; allows for carryover where the credit exceeds the tax due; provides for recapture if the property ceases to qualify during the first five years after acquisition; creates the mortgage credit certificate credit against personal income tax.
STATE OF NEW YORK
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3276
2013-2014 Regular Sessions
IN ASSEMBLY
January 24, 2013
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Introduced by M. of A. RABBITT, THIELE, KOLB, FINCH, McDONOUGH, RAIA,
McKEVITT -- Multi-Sponsored by -- M. of A. BARCLAY -- read once and
referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to providing a credit against
income tax in the form of a mortgage credit certificate for first-time
home buyers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 606 of the tax law is amended by adding a new
2 subsection (vv) to read as follows:
3 (vv) Mortgage credit certificate. (1) A taxpayer shall be allowed a
4 credit, to be computed as hereinafter provided, against the tax imposed
5 by this article. The amount of the credit shall be equal to twenty-five
6 percent of a qualified mortgage credit certificate not to exceed two
7 thousand dollars per year.
8 (2) If the credit allowable under paragraph one of this subsection for
9 any taxable year exceeds the taxpayer's tax for such year, the excess
10 credit may be carried over to the following year or years and may be
11 deducted from the taxpayer's tax for such year or years.
12 (3) (A) A taxpayer who is a first-time home buyer shall be entitled to
13 a qualified mortgage credit certificate from a private lender for the
14 annual amount of interest to be paid to finance the cost of the acquisi-
15 tion of a principal residence.
16 (B) A mortgage credit certificate may only be transferred by the
17 taxpayer to a lending institution including a non-depository institution
18 in connection with a loan:
19 (i) that is secured by the principal residence with respect to which
20 the credit relates, and
21 (ii) the proceeds of which may not be used for any purpose other than
22 the acquisition of such principal residence.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05258-01-3
A. 3276 2
1 (C) In exchange for which such lending institution provides the
2 taxpayer, (i) a reduction determined as provided in such regulations in
3 the rate of interest on the loan; or (ii) if the taxpayer so elects with
4 respect to a specified amount of the face amount of such a certificate
5 relating to a building:
6 a. which is a targeted area residence (within the meaning of section
7 143(j)(1) of the Internal Revenue Code), or
8 b. which is located in a federal enterprise or empowerment zone or an
9 empire zone, a payment which is substantially equivalent to such speci-
10 fied amount to be used to reduce the taxpayer's cost of purchasing the
11 building (and only the remainder of such face amount shall be taken into
12 account under clause (i) of this subparagraph).
13 The amount of the credit specified in the certificate shall be allowed
14 to the lender only to offset the tax of such lender due under the
15 provisions of article nine-A or thirty-two of this chapter. The lender
16 may carry forward all unused amounts under this paragraph until
17 exhausted.
18 (D) For purposes of this paragraph, the term "qualified mortgage cred-
19 it certificate" means a certificate:
20 (i) issued to the taxpayer, in accordance with procedures prescribed
21 by the commissioner,
22 (ii) the face amount of which shall be equal to the amount of the
23 annual interest to be paid on a loan or loans to finance the cost of the
24 acquisition of a principal residence by a first-time home buyer,
25 (iii) which may only be used by the taxpayer in connection with a
26 loan:
27 a. that is secured by the residence with respect to which the credit
28 relates, and
29 b. the proceeds of which may not be used for any purpose other than
30 the acquisition of such residence.
31 (E) The term "first-time home buyer" includes any taxpayer who has not
32 owned his or her principal residence within the preceding five years and
33 who meets the eligibility requirements imposed by the state of New York
34 mortgage agency for its forward commitment loan program pursuant to
35 article eight of the public authorities law.
36 (F) The term "principal residence" means a dwelling in the state owned
37 as a home and so much of the land abutting it, not exceeding one acre,
38 as is reasonably necessary for use of the dwelling as a home, and may
39 consist of part of a multiple dwelling or multi-purpose building includ-
40 ing a cooperative or a condominium.
41 (G) If the taxpayer holds stock as a tenant-shareholder in a cooper-
42 ative housing corporation such shareholder shall be treated as owning
43 the house or apartment which the taxpayer is entitled to occupy as such
44 shareholder.
45 (4) (A) If, before the end of the five-year period beginning on the
46 date of purchase of such residence by the taxpayer:
47 (i) the taxpayer disposes of such taxpayer's interest in such resi-
48 dence, or
49 (ii) such residence ceases to be used as the principal residence of
50 the taxpayer,
51 the taxpayer's tax imposed by this article for the taxable year in which
52 such disposition or cessation occurs shall be increased by the recapture
53 percentage of the credit allowed under this subsection for all prior
54 taxable years with respect to such credit.
A. 3276 3
1 (B) For purposes of subparagraph (A) of this paragraph, the recapture
2 percentage shall be determined in accordance with regulations adopted by
3 the commissioner.
4 (5) The commissioner in conjunction with the superintendent of finan-
5 cial services shall prescribe such regulations as may be appropriate to
6 carry out the purposes of this subsection, including regulations where
7 less than all of a building is used as a principal residence and where
8 more than one taxpayer use the same dwelling unit as their principal
9 residence.
10 § 2. This act shall take effect on the first of January next succeed-
11 ing the date on which it shall have become a law and shall apply to
12 taxable years commencing on and after such date; provided that the
13 commissioners of taxation and finance and housing and community renewal
14 and the superintendent of financial services are authorized to promul-
15 gate any and all rules and regulations and take any other measures
16 necessary to implement this act on its effective date on or before such
17 date.
