ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, Nos. 1327 and 2873

with committee amendments

STATE OF NEW JERSEY

DATED:  January 4, 2024

      The Assembly Appropriations Committee reports favorably and with committee amendments Assembly Bill Nos. 1327 and 2873 ACS.

      As amended, this bill would revise criteria to establish the base year for the homestead property tax reimbursement.  Under current law, when an eligible claimant moves from one home to another, the base year changes to the first full tax year during which the person resides in the new homestead, and then a claimant is required to wait an additional tax year in order to be deemed “eligible” for the homestead property tax reimbursement.

      This bill would allow the claimant to retain eligibility following a move to another New Jersey homestead.  Thus, such a claimant would be able to qualify as an eligible claimant immediately following such a move and would not be required to wait an additional tax year in order to claim a reimbursement.  In this case, the homestead reimbursement payment would be based on the property taxes assessed on the current homestead for the tax year prior to which the claimant resides in the current homestead.  However, if the new homestead is “new construction,” which is defined as any homestead that first became taxable during the year in which the eligible claimant initially takes residence in the homestead or the year prior thereto, the base year would be the first full tax year following the construction’s completion. 

      The bill would exclude from immediate eligibility claimants who move for tax years commencing prior to January 1, 2023.

COMMITTEE AMENDMENTS:

      The committee amendments make changes to the tax years in which a homestead claimant would be unable to become immediately eligible for a homestead property tax reimbursement following a move to another homestead in New Jersey.  The amendments would exclude claimants who move from immediate eligibility for tax years commencing prior to January 1, 2023.

      The amendments also change the effective date of the bill.  Rather than having the bill take effect immediately, it would instead take effect for tax years beginning on or after January 1 of the year next following enactment.

FISCAL IMPACT:

      The Office of Legislative Services (OLS) estimates that the projected additional State costs are $17,100 to $85,500 in FY 2026 and $34,600 to $173,000 in FY 2027 and annually thereafter.  The timing of homestead property tax reimbursement payments precludes the bill from having any fiscal impact in FY 2024. 

      Data provided by the Division of Taxation indicates that approximately 100 homeowners in each year from calendar year 2015 through calendar year 2017 regained their eligibility for the homestead property tax reimbursement following a change in residence.  The OLS assumes that 100 to 500 homeowners will be affected by the bill.