Majority Leader Louis Greenwald re-introduced a bill that would establish a New Jersey Homebuyer Tax Credit Program. Under this program, first-time homebuyers would be eligible to receive a tax credit for the purchase of their house.
With factors such as low interest rates, remote work capabilities, and reassessed priorities due to the COVID-19 pandemic causing a housing boom throughout New Jersey, real estate prices increased by 12 percent in 2020 and 15 percent in 2021. Higher costs are pricing many families out of the housing market, so that many New Jerseyans are no longer able to afford a starter home.
The bill seeks to counteract exorbitant prices by offering a tax credit to New Jersey residents who have never owned their own home. First-time homebuyers would be eligible for a tax credit refundable up to $15,000 or five percent of the purchase price of their house – whichever is lower.
“I still remember the joy my wife and I felt the day we purchased our first home and realized it was a place we could build our life together,” said Greenwald (D-Camden, Burlington). “Every family deserves the same opportunity to purchase their own home, but the dream of owning a home in New Jersey is fading– especially for many young people just starting out. If we do not work to make housing affordable in New Jersey, we risk leaving these residents behind.”
“This program would give more New Jerseyans the financial means to buy their first homes within their communities, rather than having to seek housing outside the state. These kinds of incentives will be critical to making our state more affordable for everyone.”
To ensure the program specifically assists low-income and middle-class families, the bill specifies that the household’s permanent residents could not make over $118,000 for up to two people or over $135,000 for three or more people, while the value of the property itself could not exceed $560,000. To prevent people from buying homes simply to ‘flip’ them, the homebuyer would also be required to use the house as their primary residence for the first three years after purchasing it.
The program would be operational for two years. At the end of the two years, the Office of Revenue and Economic Analysis in the Department of the Treasury would submit a report to the Governor and Legislature on the efficacy of the tax credit program, so that it may be determined whether to extend the program.