Faced with veto, pols aim for do-over of “NY First Home” bill

ALBANY — Just months after approving it, New York lawmakers have begun repealing a law that would give first-time homeowners a chance to put away $10,000 in tax-free accounts to use toward a down payment.

The reason: It seems not enough study was done about the ramifications.

Dubbed the “New York First Home” bill, the measure would allow prospective first-time home buyers to save for a down payment by putting away up to $10,000 per couple ($5,000 for an individual) in tax-free accounts similar to the state’s 529 College Savings Program. The deposit would remain untaxed as long as the holder withdraws it only to purchase a home in New York as a primary residence and stay there at least two years.

State legislators approved the bill in June.

But Gov. Andrew M. Cuomo said in December the bill had technical flaws and brokered a deal with legislative leaders to repeal the law this month and substitute a bill that would require state agencies to study the “feasibility and sustainability” of such a savings program.

The state was concerned about the impact on revenue, among other things, a state source said. Another noted that the bill was problematic because it had no cap on income eligibility.

The Senate approved the repeal Monday, with the Assembly expected to follow suit. Sen. Betty Little (R-Queensbury) said the choice was either agree to a study or watch Cuomo veto the bill altogether.

Still, Senate Democrats sought to make hay, blasting the repeal bill. Sen. John Brooks (D-Seaford) called it an “unimaginable blow to Long Islanders” looking to purchase their first home and said lawmakers shouldn’t “forgo this savings plan for a ‘study.’ ”