Bill Text: NJ A5059 | 2024-2025 | Regular Session | Introduced
Bill Title: Extends eligibility for homestead rebates to residents making payments in lieu of taxes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-12-09 - Introduced, Referred to Assembly Housing Committee [A5059 Detail]
Download: New_Jersey-2024-A5059-Introduced.html
Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Extends eligibility for homestead rebates to residents making payments in lieu of taxes.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning eligibility for homestead rebates and amending P.L.1990, c.61.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1990, c.61 (C.54:4-8.58) is amended to read as follows:
2. As used in sections 2 through 10 of P.L.1990, c.61 (C.54:4-8.58 through 54:4-8.66) and sections 3 and 14 through 16 of P.L.1999, c.63 (C.54:4-8.58a and 54:4-8.66a through C.54:4-8.66c):
"Annualized rent" means, for tax years 2004 and thereafter, the rent paid by the claimant during the tax year for which the homestead rebate is being claimed, and if paid for a lease term covering less than the full tax year, the actual rent paid for the days during the term of the lease of the homestead proportionalized as if the term of the lease had been for 365 days of the tax year;
"Arm's-length transaction" means a transaction in which the parties are dealing from equal bargaining positions, neither party is subject to the other's control or dominant influence, and the transaction is entirely legal in all respects and is treated with fairness and integrity;
"Condominium" means the form of real property ownership provided for under the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.);
"Continuing care retirement community" means a residential facility primarily for retired persons where lodging and nursing, medical or other health related services at the same or another location are provided as continuing care to an individual pursuant to an agreement effective for the life of the individual or for a period greater than one year, including mutually terminable contracts, and in consideration of the payment of an entrance fee with or without other periodic charges;
"Cooperative" means a housing corporation or association which entitles the holder of a share or membership interest thereof to possess and occupy for dwelling purposes a house, apartment, manufactured or mobile home or other unit of housing owned or leased by the corporation or association, or to lease or purchase a unit of housing constructed or to be constructed by the corporation or association;
"Director" means the Director of the Division of Taxation in the Department of the Treasury;
"Dwelling house" means any residential property assessed as real property which consists of not more than four units, of which not more than one may be used for commercial purposes, but shall not include a unit in a condominium, cooperative, horizontal property regime or mutual housing corporation;
"Homestead" means:
a. (1) a dwelling house and the land on which that dwelling house is located which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;
(2) a dwelling house situated on land owned by a person other than the claimant which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;
(3) a condominium unit or a unit in a horizontal property regime which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;
(4) for purposes of this definition as provided in this subsection, in addition to the generally accepted meaning of owned or ownership, a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more and is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear a share of the property taxes that are assessed upon the continuing care retirement community, if a share is attributable to the unit that the resident occupies;
b. a unit in a cooperative or mutual housing corporation which constitutes the place of domicile of a residential shareholder or lessee therein, or of a lessee, or shareholder who is not a residential shareholder therein, and which is used by the claimant as the claimant's principal residence; and
c. a unit of residential rental property which unit constitutes the place of the claimant's domicile and is used by the claimant as the claimant's principal residence;
"Horizontal property regime" means the form of real property ownership provided for under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.);
"Gross income" means all New Jersey gross income required to be reported pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., other than income excludable from the gross income tax return, but before reduction thereof by any applicable exemptions, deductions and credits, received during the taxable year by the owner or residential shareholder in, or lessee of, a homestead;
"Manufactured home" or "mobile home" means a unit of housing which:
(1) Consists of one or more transportable sections which are substantially constructed off site and, if more than one section, are joined together on site;
(2) Is built on a permanent chassis;
(3) Is designed to be used, when connected to utilities, as a dwelling on a permanent or nonpermanent foundation; and
(4) Is manufactured in accordance with the standards promulgated for a manufactured home by the Secretary of the United States Department of Housing and Urban Development pursuant to the "National Manufactured Housing Construction and Safety Standards Act of 1974," Pub.L.93-383 (42 U.S.C. s.5401 et seq.) and the standards promulgated for a manufactured or mobile home by the commissioner pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.);
"Mobile home park" means a parcel of land, or two or more parcels of land, containing no fewer than 10 sites equipped for the installation of manufactured or mobile homes, where these sites are under common ownership and control for the purpose of leasing each site to the owner of a manufactured or mobile home for the installation thereof, and where the owner or owners provide services, which are provided by the municipality in which the park is located for property owners outside the park, which services may include but shall not be limited to:
(1) The construction and maintenance of streets;
(2) Lighting of streets and other common areas;
(3) Garbage removal;
(4) Snow removal; and
(5) Provisions for the drainage of surface water from home sites and common areas;
"Mutual housing corporation" means a corporation not-for-profit, incorporated under the laws of this State on a mutual or cooperative basis within the scope of section 607 of the Lanham Act (National Defense Housing), Pub.L.849, 76th Congress (42 U.S.C. s.1521 et seq.), as amended, which acquired a National Defense Housing Project pursuant to that act;
"Principal residence" means a homestead actually and continually occupied by a claimant as the claimant's permanent residence, as distinguished from a vacation home, property owned and rented or offered for rent by the claimant, and other secondary real property holdings;
"Property tax" means payments to a municipality based upon an assessment made by the municipality upon real property on an ad valorem basis on land and improvements, and shall include the amount of property tax credit as defined in section 1 of P.L.2018, c.11 (C.54:4-66.6) [, but shall not include]. For purposes of this definition, "property tax" shall include payments made to a municipality in lieu of taxes;
"Rent" means the amount due in an arm's-length transaction solely for the right of occupancy of a homestead that is a unit of residential rental property. Rent shall not include any amount paid under the federal Housing Choice Voucher (Section 8) Program or paid as a rental assistance grant under section 1 of P.L.2004, c.140 (C.52:27D-287.1). If the director finds that the parties in a rental transaction have not dealt with each other in an arm's-length transaction and that the rent due was excessive, the director may, for purposes of the homestead rebate claim, adjust the rent claimed in the homestead rebate application to a reasonable amount of rent;
"Rent constituting property taxes" means 18% of the rent paid by the homestead rebate claimant during the tax year on a unit of residential rental property which constitutes the claimant's homestead, and in the case of a manufactured home or mobile home in a mobile home park which constitutes the claimant's homestead means 18% of the site fee paid by the claimant during the tax year to the owner of the mobile home park. Provided however, that for tax year 2004 and for each tax year thereafter, rent constituting property taxes shall equal 18% of annualized rent, and in the case of a manufactured home or mobile home in a mobile home park rent constituting property taxes shall equal 18% of a similarly annualized site fee;
"Resident" means an individual:
a. who is domiciled in this State, unless he maintains no permanent place of abode in this State, maintains a permanent place of abode elsewhere, and spends in the aggregate no more than 30 days of the tax year in this State; or
b. who is not domiciled in this State but maintains a permanent place of abode in this State and spends in the aggregate more than 183 days of the tax year in this State, unless the individual is in the Armed Forces of the United States;
"Residential rental property" means:
a. any building or structure or complex of buildings or structures in which dwelling units are rented or leased or offered for rental or lease for residential purposes;
b. a rooming house, hotel or motel, if the rooms constituting the homestead are equipped with kitchen and bathroom facilities;
c. any building or structure or complex of buildings or structures constructed under the following sections of the National Housing Act (Pub.L.73-479) as amended and supplemented: section 202, Housing Act of 1959 (Pub.L.86-372) and as subsequently amended, section 231, Housing Act of 1959; and
d. a site in a mobile home park equipped for the installation of manufactured or mobile homes, where these sites are under common ownership and control for the purpose of leasing each site to the owner of a manufactured or mobile home for the installation thereof;
"Residential shareholder in a cooperative or mutual housing corporation" means a tenant or holder of a membership interest in that cooperative or corporation, whose residential unit therein constitutes the tenant or holder's domicile and principal residence, and who may deduct real property taxes for purposes of federal income tax pursuant to section 216 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.216; and
"Tax year" means the calendar year in which property taxes are due and payable.
(cf: P.L.2018, c.11, s.10)
2. This act shall take effect immediately.
STATEMENT
This bill would extend eligibility for rebates under the "Homestead Property Tax Credit Act," P.L.1990, c.61, to State residents who make payments in lieu of taxes ("PILOTs") to a municipality for their homestead.
Under the act, State residents with incomes not over $250,000 are eligible for a rebate or credit equal to a percentage of property taxes, or rent constituting property taxes, paid on their homestead, up to $10,000. A resident is eligible for a rebate regardless of whether property taxes are paid directly to their municipality or indirectly through the payment of rent. For purposes of determining the amount of the rebate for eligible tenants, the portion of rent that is deemed to constitute property taxes is 18 percent of rent paid during the tax year.
The act defines "property tax" as payments made to a municipality based upon an ad valorem assessment of a parcel of real property, not including any PILOT payments made to a municipality. An ad valorem assessment is an assessment based on a property's fair market value.
The bill would amend the definition of "property tax" under the Homestead Property Tax Credit Act to include PILOTs made to a municipality for an eligible homestead. By making this change, the bill would allow State residents to qualify for a homestead rebate regardless of whether the resident pays property taxes based on an ad valorem assessment of their homestead or makes payments in lieu of property taxes. Given that the Homestead Property Tax Credit Act currently serves as the basis under which "Affordable New Jersey Communities for Homeowners and Renters Rebates," more commonly referred to as "ANCHOR rebates," are authorized by the annual appropriations act, this bill would ensure that both types of taxpayer are eligible for these rebates each year.
