New York Senate Bill S00850

New York 2025-2026 Regular Session

• Introduced: 1/8/25
• Refer: 1/8/25
• Report Pass: 5/28/25
• Refer: 1/7/26

Caption

Establishes the "first-time homebuyer tax credit act"; provides that a qualified taxpayer shall be allowed a credit against the taxes imposed by this article for taxes levied on the taxpayer's primary residence by or on behalf of any county, city, town, village, or school district in which such property is located.

Summary

S00850 would create the “first-time homebuyer tax credit act” in New York tax law. The bill authorizes a refundable personal income tax credit for qualified taxpayers who purchase a primary residence and who, during the prior three years, did not own a primary residence and are not married to someone who did. It also excludes taxpayers who own vacation or investment homes. The credit applies to local property taxes levied on the taxpayer’s primary residence by counties, cities, towns, villages, or school districts. The credit is structured to phase down over five years after purchase: 50% of eligible property taxes in year one, 40% in year two, 30% in year three, 20% in year four, and 10% in year five, with no credit after year five. If the credit exceeds the taxpayer’s income tax liability, the excess is treated as an overpayment and refunded or credited without interest. The bill would take effect immediately and apply to taxable years beginning on or after January 1, 2026.

Impact

The bill would amend section 606 of the Tax Law to add a new refundable credit for first-time homebuyers, directly affecting state income tax administration and local property tax burdens on qualifying owner-occupants. It would create a new class of eligible taxpayers and require the Department of Taxation and Finance to issue implementing regulations. The measure could reduce net tax liability for new homeowners and indirectly subsidize homeownership by offsetting local property taxes for the first five years of ownership.

Sentiment

The bill’s stated purpose is strongly supportive of homeownership, affordability, and wealth-building, and its sponsors frame it as a response to high housing costs and property taxes that make it difficult for younger and first-time buyers to remain in their communities. The only recorded committee vote was 4-3 in the Senate Budget and Revenue Committee, suggesting the proposal drew meaningful support but also notable opposition. No transcript was provided, so the available record shows general pro-homebuyer sentiment with some fiscal or policy skepticism implied by the split vote.

Contention

The main points of contention are likely the fiscal cost of the refundable credit, its effect on state revenues, and whether a tax credit is the best way to address housing affordability. Supporters emphasize helping first-time buyers, encouraging homeownership, and countering high property taxes; opponents may question whether the benefit is well-targeted, whether it could distort housing markets, and whether it adequately addresses underlying supply and affordability problems. The narrow committee vote indicates disagreement over these policy and budget tradeoffs.