S3312

An Act modifying Stay NJ property tax credit program eligibility criteria and amending P.L.2023, c.75.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 2 of P.L.2023, c.75 (C.54:4-8.75b) is amended to read as follows:

2. As used in this act:

"ANCHOR" means the Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program.

"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.).

"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 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.

"Eligible claimant" means a State resident who is 65 or more years of age on or before December 31, 2024 or who is 65 or more years of age on or before December 31 of any subsequent [benefit] tax year, who is the owner for at least one full tax year of a homestead in this State on or after December 31, 2023 and any subsequent [benefit] tax year, and who has income for the prior tax year that is less than $500,000. An “eligible claimant” shall include a claimant who is the owner of a homestead in this State and relocates to another homestead in the State during the prior tax year so long as the claimant is the owner of any homestead in the State, including both the claimant’s current and prior homesteads, for the duration of that prior tax year and satisfies all other eligibility requirements of the “Stay NJ Act,” P.L.2023, c.75 (C.54:4-8.75a et al.).

"Homestead" means:

a. a dwelling house and the land on which that dwelling house is located which constitutes the place of the eligible claimant's domicile and is owned and used by the eligible claimant as the eligible claimant's principal residence;

b. a condominium unit or a unit in a horizontal property regime or a continuing care retirement community which constitutes the place of the eligible claimant's domicile and is owned and used by the eligible claimant as the eligible claimant's principal residence. 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, 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, separately from any other charges, the proportionate share of property taxes attributable to the unit that the resident occupies; or

c. 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, which is used by the eligible claimant as the eligible claimant's principal residence; or a mutual housing corporation.

"Homestead property tax reimbursement" means the property tax benefit provided pursuant to P.L.1997, c.348 (C.54:4-8.67 et seq.).

"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.).

"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., before the application of any authorized exclusion or deduction, except also including: interest income excluded from taxation pursuant to N.J.S.54A:6-14; pension and annuity income excluded from taxation pursuant to N.J.S.54A:6-10; income derived from distributions from or roll overs to a Roth IRA excluded from taxation pursuant to N.J.S.54A:6-28; other retirement income excluded from taxation pursuant to N.J.S.54A:6-15; and Social Security income excluded from taxation pursuant to N.J.S.54A:6-2, as self-reported by the homeowner.

"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, (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 an eligible claimant as the eligible claimant's permanent residence, including a homestead on which an eligible claimant made one or more payments in lieu of taxes to the municipality in which the homestead is located, as distinguished from a vacation home, property owned and rented or offered for rent by the eligible claimant, and other secondary real property holdings.

"Property tax" means the general property tax due and payable by the owner of a homestead, based on an assessment made by the municipality upon real property on an ad valorem basis on land and improvements, and shall include payments in lieu of taxes.

"State resident" or "resident" means an individual:

a. who is domiciled in this State, unless the individual 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.

"Stay NJ property tax credit" means a property tax credit applied to an eligible claimant's property tax bill in accordance with the provisions of the "Stay NJ Act," P.L.2023, c.75 (C.54:4-8.75a et al.).

"Task force" means the Stay NJ Task Force established pursuant to section 18 of P.L.2023, c.75 (C.54:4-8.75o).

"Tax year" or "taxable year" means the prior calendar year, January 1 through December 31, in which a homestead is assessed for property taxation and the property tax is levied thereon, and paid.

"Tax year quarter" means a three-month period of a tax year consisting of January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through December 31.

(cf: P.L.2024, c.88, s.1)

2. Section 3 of P.L.2023, c.75 (C.54:4-8.75c) is amended to read as follows:

3. a. (1) There is established the Stay NJ property tax credit program. The director shall administer the Stay NJ property tax credit that shall provide to an eligible claimant a property tax credit in the amount of 50 percent of the property tax billed to the eligible claimant's principal residence in the prior tax year, except that the amount of the credit, together with the combined amount of the ANCHOR rebate and the homestead property tax reimbursement received by the eligible claimant for the tax year, shall not exceed the maximum amount allowable for the tax year pursuant to subsection c. of this section.

(2) Nothing in this section shall be deemed to limit the amount of the homestead property tax reimbursement or ANCHOR rebate that shall be paid to an eligible claimant for any tax year in which the combined value of the homestead property tax reimbursement and ANCHOR rebate exceeds the amount of the maximum allowable Stay NJ property tax credit, as determined pursuant to subsection c. of this section.

(3) A Stay NJ property tax credit for an eligible claimant who is a tenant shareholder in a cooperative, mutual housing organization, or continuing care retirement community shall be based on the eligible claimant's proportionate share of the property taxes assessed against that real property that are attributable to the eligible claimant's unit. Property tax credits shall be allowed pursuant to this section in relation to the property taxes billed or allocable to an eligible claimant who has more than one homestead in a tax year, but the aggregate amount of the property taxes or property tax credits claimed shall not exceed the total proportionate amounts of property taxes assessed and levied against or allocable to each homestead for the proportion of the tax year quarter to which the taxpayer occupies it as the taxpayer's principle residence.

(4) A Stay NJ property tax credit for an eligible claimant who relocates to another homestead during the prior tax year and remains the owner of a homestead in the State shall be based on the amount of property tax paid by the eligible claimant during the portion of the tax year in which the eligible claimant owned and occupied each homestead as the eligible claimant’s principal residence.

b. The amount of the Stay NJ property tax credit shall be calculated for each eligible claimant by the director and shall be paid in accordance with the provisions of section 5 of P.L.2023, c.75 (C.54:4-8.75e).

c. The maximum amount to be credited to an eligible claimant shall be $6,500 for tax year 2026 and for each tax year thereafter, the maximum amount to be credited to an eligible claimant shall be increased based on the annual percentage increase in the average residential property tax bill as shall be computed by the Director of the Division of Local Government Services in the Department of Community Affairs.

d. Except as otherwise provided in subsection a. of section 5 of P.L.2023, c.75 (C.54:4-8.75e), an eligible claimant shall be entitled to a Stay NJ property tax credit annually, on proper claim being made therefor to the director. Notwithstanding any provision of P.L.2023, c.75 (C.54:4-8.75a et al.) to the contrary, the amount of property taxes used to determine the amount of the Stay NJ property tax credit shall not be reduced by the amount of the deductions taken by an eligible claimant pursuant to P.L.1963, c.171 (C.54:4-8.10 to 54:4-8.23) and P.L.1964, c.255 (C.54:4-8.40 to 54:4-8.45 et al.). The surviving spouse of a deceased resident of this State who during his or her life received a Stay NJ property tax credit shall be entitled, so long as the surviving spouse does not remarry, remains a resident in the same homestead with respect to which the Stay NJ property tax credit was granted, and is an eligible claimant, to the same Stay NJ property tax credit, upon the same conditions, with respect to the same homestead.

(cf: P.L.2024, c.88, s.2)

3. This act shall take effect immediately.

STATEMENT

This bill modifies the eligibility criteria for the Stay NJ property tax credit program (“Stay NJ”) to include State residents who relocate to another homestead in New Jersey so long as the resident is the owner of any homestead in the State for the duration of the tax year.

The Stay NJ program provides eligible claimants a property tax credit equal to 50 percent of the claimant’s property taxes paid on their principal residences during the prior tax year, up to an initial maximum of $6,500, with future increases based on the average increase in property tax bills in subsequent years. In order to receive a Stay NJ benefit, an eligible claimant is required to be a State resident 65 years of age or older, own a homestead in the State for all of the prior tax year, and have an income of less than $500,000 in the prior tax year.

Under current law, a State resident who relocates to another homestead during the prior tax year would not qualify under the Stay NJ program. The bill modifies the program’s eligibility requirements to include these individuals, provided that all other eligibility requirements are met.

Specifically, the bill provides that an eligible claimant would include the owner of a homestead in this State who relocates to another homestead in the State during the prior tax year so long as the claimant is the owner of any homestead in the State, including both the claimant’s current and prior homesteads, for the duration of that prior tax year and satisfies all other program eligibility requirements. The amount of the Stay NJ benefit provided to these claimants would be based on the amount of property taxes paid by the claimant for the period of time in which the claimant owned and occupied each homestead as the claimant’s principal residence.