New York Senate Bill S00849

New York 2025-2026 Regular Session

• Introduced: 1/8/25
• Refer: 1/8/25
• Refer: 1/7/26

Caption

Establishes the USDA construction tax credit for a percentage of the profit on any newly constructed home that is sold to someone qualifying with a USDA mortgage.

Summary

This bill would create a new New York State tax credit called the USDA construction tax credit. The credit would be available to taxpayers who sell newly constructed property to a buyer financing the purchase with a USDA mortgage, as defined by certain federal USDA housing regulations. The amount of the credit would be up to 15 percent of the difference between the seller’s total construction cost and the final sale price, effectively tying the tax benefit to the profit margin on the sale of a newly built home. The bill amends both the corporate franchise tax and the personal income tax provisions of the Tax Law so that eligible taxpayers can claim the credit against either tax, depending on their filing status. It also directs the Commissioner of Taxation and Finance to adopt rules and regulations to implement the credit, and it would take effect immediately upon enactment.

Impact

The bill would add a new refundable or nonrefundable-style tax credit mechanism to New York’s Tax Law for builders or sellers of newly constructed homes sold to USDA mortgage borrowers. It would affect sections 210-B and 606 of the Tax Law by creating parallel credits for corporate and personal income taxpayers, and it would likely reduce state tax liability for qualifying construction and home-sale transactions in rural or eligible USDA financing markets.

Sentiment

Based on the bill text and caption, the measure appears generally supportive of housing construction and rural homeownership, with a pro-development and pro-affordability framing. No committee transcript or recorded votes were provided, so there is no documented opposition or support beyond the bill’s stated purpose and sponsors.

Contention

The main policy question raised by the bill is whether New York should subsidize builders based on the spread between construction cost and sale price, and whether limiting the credit to sales financed through USDA mortgages is an appropriate way to target assistance. Potential points of contention include the fiscal cost to the state, whether the credit primarily benefits builders rather than homebuyers, and whether the USDA mortgage requirement narrows the benefit too much or creates uneven treatment between rural and non-rural housing markets.