Tax break renewed for new-home buyers
First time home buyers can get a New York State tax break when buying a newly built home. Gov. Andrew Cuomo signed the renewal into law June 9, 2011. (Dec. 26, 2007). Credit: Peter Dilauro
More than five months after it expired, New York State has reinstituted a temporary break on property taxes for first-time buyers of newly-built houses.
Gov. Andrew M. Cuomo this week signed into law a bill permitting counties, towns, school districts and other local governments statewide to cut a homeowner's tax bill in half in the first year of ownership. The exemption then falls by 10 percentage points each year, with full property taxes being paid in the sixth year.
The break for first-time buyers began nine years ago but expired on Dec. 31, 2010, because only one legislative house, the Assembly, passed an extension.
Last month the bill was adopted unanimously by the Assembly and the State Senate.
"In the current economic times it can be tough for working families to try and put enough resources together to buy a home," said Assemb. Robert Sweeney (D-Lindenhurst), who sponsored the law with Sen. Kenneth LaValle (R-Port Jefferson). "For many of them, this law can help make home ownership a reality."
LaValle agreed, adding he hoped the tax break "would encourage our young people to remain on Long Island" and would boost home builders.
He also vowed to mount "a campaign" to get more towns and school districts to participate in the program.
Nassau and Suffolk counties have offered the tax break. So have seven of Long Island's 13 towns -- Babylon, Hempstead, Huntington, Islip, Smithtown, Southampton and Riverhead. However, school districts, which account for the lion's share of property taxes, have been reticent. The exceptions include the Copiague and Farmingdale schools.
To be eligible for the full tax break, first-time home buyers must purchase a newly constructed house for less than $656,771 and have household income of less than $122,161. The limits are set by the state and are expected to rise over time.
First-time home buyers of previously occupied homes can also receive a partial tax exemption if they make more than $3,000 worth of improvements. However, the tax reduction applies only to the portion of the property assessment affected by the improvements.
