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A05616 Summary:

COSPNSRSkoufis, Schimminger, Santabarbara, Mosley, Hooper, Cook, Skartados, Joyner, Sepulveda, Cahill, Davila, Otis, Blake, Jean-Pierre, Ortiz, Braunstein, Cusick, Rodriguez, Weprin, Colton, Quart, Lupardo, Carroll, Rivera, Kim, Harris, Crespo, Steck, Vanel, Perry, Benedetto, Fahy, Hyndman, Dickens, Brabenec, Aubry, Barron, Woerner, Jones, Zebrowski, Lifton, Wright, Raia, Niou, De La Rosa, Rosenthal L, D'Urso, Morelle, Simon, Dilan, Glick, Gunther, Pichardo, Arroyo, Jaffee, Johns, Barrett, Peoples-Stokes, Cymbrowitz, Lavine, Barnwell, Mayer, Bronson, Wallace
MLTSPNSRAbbate, Crouch, Englebright, Hevesi, Jenne, Lentol, Magee, McDonald, Nolan, Thiele, Titone
Add Art 28 §§1250 - 1256, Priv Hous Fin L; amd §612, Tax L
Establishes the New York state first home savings program to authorize first time home buyers to establish savings accounts to buy their first home.
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A05616 Actions:

02/10/2017referred to ways and means
05/25/2017advanced to third reading cal.525
06/05/2017passed assembly
06/05/2017delivered to senate
06/07/2017recalled from senate
06/07/2017vote reconsidered - restored to third reading
06/07/2017amended on third reading 5616a
06/14/2017amended on third reading 5616b
06/19/2017repassed assembly
06/19/2017returned to senate
06/19/2017SUBSTITUTED FOR S4058B
06/19/20173RD READING CAL.1950
12/06/2017delivered to governor
12/18/2017signed chap.472
12/18/2017approval memo.43
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A05616 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the private housing finance law, in relation to establishing the New York state first home savings program, which authorizes first time home buyers to establish savings accounts to purchase a home; and to amend the tax law, in relation to establishing a personal income tax deduction for deposits into such accounts   PURPOSE: To provide future first time homebuyers a special savings account and deduction similar to the 529 College Savings Program that may be used for the purchase of a first home in New York State. Under this legis- lation, an individual would be eligible to make a $5,000.00 per year tax deductible deposit into a New York State First Home Savings account, $10,000.00 for couples. In addition, any interest accrued would remain untaxed. The savings account would remain under the sole custody of the New York State Comptroller.   SUMMARY OF PROVISIONS: Section 1 adds a new Article 28 to the Private Housing Finance Law to create the New York State First Home Savings Program to incentivize residents to save for the purchase of a first home in the State. A first time home can be the purchase or construction of a house, townhouse, condominium, or unit in a cooperative housing corporation within the State to be used as a primary residence of the individual for not less than two years after purchase, or construction. The New York State Comptroller and Commissioner of the Department of Taxation and Finance shall develop and implement the program in a manner consistent with the provisions of this article through rules and regu- lations. The Comptroller is responsible for entering into contracts with financial organizations to allow for holding and investments associated with this program. Contributions to first home savings accounts shall be limited to $100,000 per account. In the event of a non-qualified withdrawal, or if the home is not used as a primary residence for a period of two years, the entire account would be taxed, including any interest, as though it were income in the tax years the monies were withdrawn. A 10% state penalty tax on earnings may also apply. Penalties may be waived in the event of death, an unforeseeable emergency, qualifying military service, or employment location outside of the State whereby residency is required. Statements shall be provided to account owners annually and include contributions made, the value and distributions made during such period. An annual fee may be imposed upon the account owner for the maintenance of the account. To establish that an individual is a first time home buyer, the individ- ual shall complete a form prescribed by the Comptroller certifying under penalties of perjury, that such individual is a first time home buyer. A New York First Time Home Savings account may not be used for business, a vacation home, or as an investment, except an owner occupied multiple dwelling with no more than two rental units. Monies withdrawn from a New York First Home Savings account and any interest which has accrued shall not be considered as income to the individual and taxed as such if the monies are applied for the purchase, or construction of a qualified first home purchase. Section 2 amends subsection (c) of section 612 of the tax law by adding a new paragraph 44 to provide the amount that may be subtracted from federal adjusted gross income pursuant to subsection (w) of this section. Section 3 amends section 612 of the tax law to add a new subsection (w) to provide that an account owner shall be able to deduct annually from his or her federal adjusted gross income an amount, not to exceed five thousand dollars ($10,000 if married and filing jointly), deposited into a New York State First Home Savings account. Section 4 sets forth the effective date.   JUSTIFICATION: Home ownership has long been recognized as a part of the "American Dream." However, down payment requirements, closing costs, real estate transfer taxes and mortgage recording taxes can often make first time homeownership seem out of reach. The New York State First Home Savings Program will allow persons who have not had an ownership interest in a principal residence to establish an account for the purchase of their first home, using a deduction against their personal income taxes of up to five thousand dollars for individuals and ten thousand dollars for married couples. This legislation is a responsible way to incentivize the dream of home ownership and help our housing market rebound. It will also stimulate the local economy and create jobs by increasing the demand for single family homes, townhouses, condominiums or cooperative housing units in New York State. Responsible homeownership is an important part of the housing continuum and the New York State First Time Home Savings Program will help make that a reality for future first time home buyers.   PRIOR LEGISLATIVE HISTORY: 2016: S.7903-A Passed Senate   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect on the 180th day after it shall have become a law, and shall apply to all taxable years commencing on or after the first of January next succeeding the date on which it shall have become law; provided however, that subdivision 14 of section 1255 of the private housing finance law, as added by section one of this act, shall take effect immediately.
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