New York Assembly Bill A02040

New York 2025-2026 Regular Session

• Introduced: 1/14/25
• Refer: 1/14/25
• Refer: 1/7/26

Caption

Establishes the green building credit for construction or rehabilitation of property in conformity with certain energy efficiency standards.

Summary

This bill establishes a new personal income tax credit for individuals who construct or rehabilitate qualifying residential real property in accordance with recognized green building standards. To qualify, the project must conform to energy efficiency standards established by the National Association of Home Builders or the LEED rating system developed by the U.S. Green Building Council, and the taxpayer must provide proof under regulations to be issued by the Department of Environmental Conservation and the tax commissioner. The credit equals the taxpayer’s allowable costs for the construction or rehabilitation of the qualifying residence, but it is capped at $10,000 and may be claimed no more than once every ten years. The bill defines allowable costs broadly to include construction, rehabilitation, commissioning, professional fees, certain closing and filing costs, site preparation, and some interior finish and utility-related expenses, while excluding items such as land, telephone systems, computers, fuel cells, photovoltaic modules, and certain air-conditioning equipment. The credit may be carried forward for up to five years if it exceeds the taxpayer’s liability.

Impact

The bill would amend section 606 of the Tax Law by adding a new green building credit for taxable years beginning on or after January 1, 2027. It would create a new state tax expenditure for eligible homeowners and require the Department of Environmental Conservation, in conjunction with the tax commissioner, to adopt rules and regulations for administering the credit. The measure would affect individual taxpayers who own and improve their principal residences, including owners of units in multiple dwellings, but would not apply to land acquisition or to commercial property.

Sentiment

The available context suggests generally favorable policy intent toward encouraging energy-efficient and environmentally sustainable residential construction and rehabilitation. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of formal support or opposition in the legislative record included here. The bill’s structure indicates a pro-incentive approach aimed at promoting green building practices through the tax code.

Contention

The main potential points of contention are likely to be fiscal cost, the scope of eligible expenses, and the administrative complexity of verifying compliance with outside green-building standards. Some stakeholders may question whether the $10,000 cap is sufficient to influence behavior or whether the credit should be limited more narrowly to avoid subsidizing projects that would have occurred anyway. Others may focus on the exclusion of certain technologies and the requirement that agencies promulgate rules, which could affect how accessible and predictable the credit is for taxpayers and builders.