Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-0827.01 Rebecca Bayetti x4348
HOUSE BILL 24-1144
House Committees Senate Committees
Finance
A BILL FOR AN ACT
C
ONCERNING THE CREATION OF AN INCOME TAX CREDIT FOR SELLERS101
OF RESIDENTIAL REAL PROPERTY THAT BUY DOWN THE102
MORTGAGE INTEREST RATE OF THE BUYER OF THE PROPERTY .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill creates an income tax credit (tax credit) that is available
for income tax years starting on or after January 1, 2024, but before
January 1, 2026, for sellers of residential property in Colorado who buy
down the interest rates on the mortgage of the buyer of the property. The
amount of the tax credit is 50% of the cost of the mortgage interest rate
HOUSE SPONSORSHIP
Bockenfeld,
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. buy down. The tax credit is refundable and transferrable to any other
taxpayer.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 39-22-560 as2
follows:3
39-22-560. Tax credit for mortgage rate buydowns - tax4
preference performance statement - legislative declaration -5
definitions - repeal. (1) (a) I
N ACCORDANCE WITH SECTION 39-21-304,6
WHICH REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO7
INCLUDE A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A8
STATUTORY LEGISLATIVE DECLARATION , THE GENERAL ASSEMBLY FINDS9
AND DECLARES THAT THE PURPOSES OF THE TAX CREDIT CREATED IN THIS10
SECTION ARE TO INDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS11
AND TO IMPROVE INDUSTRY COMPETITIVENESS BY ALLOWING A SELLER OF12
RESIDENTIAL PROPERTY THAT BUYS DOWN THE MORTGAGE INTEREST RATE13
OF THE BUYER OF THE PROPERTY TO CLAIM A TAX CREDIT . SPECIFICALLY,14
THIS TAX CREDIT IS INTENDED TO INCENTIVIZE PROPERTY OWNERS TO SELL15
THEIR RESIDENTIAL PROPERTY IN A WAY THAT BENEFITS HOME BUYERS BY16
REDUCING THEIR MORTGAGE INTEREST RATES AND TO STIMULATE THE17
REAL ESTATE MARKET.18
(b) T
HE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL19
MEASURE THE EFFECTIVENESS OF THE TAX CREDIT IN ACHIEVING THE20
PURPOSES SPECIFIED IN SUBSECTION (1)(a) OF THIS SECTION BASED ON THE21
NUMBER AND VALUE OF TAX CREDITS CLAIMED AND ANY ADDITIONAL22
INFORMATION THAT IS MAINTAINED AND REPORTED TO THE STATE23
AUDITOR BY THE DEPARTMENT PURSUANT TO SUBSECTION (6) OF THIS24
SECTION.25
HB24-1144-2- (2) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE1
REQUIRES:2
(a) "B
UY DOWN" MEANS PERMANENTLY REDUCING THE INTEREST3
RATE ON A MORTGAGE BY PAYING A LUMP SUM AT CLOSING TO SECURE A4
LOWER INTEREST RATE.5
(b) "D
EPARTMENT" MEANS THE COLORADO DEPARTMENT OF6
REVENUE.7
(c) "H
OMEBUYER" MEANS AN INDIVIDUAL WHO TAKES OUT A8
MORTGAGE TO BUY RESIDENTIAL REAL PROPERTY IN THE STATE THAT WILL9
BE USED AS THE INDIVIDUAL'S PRIMARY RESIDENCE.10
(d) "Q
UALIFIED SELLER" MEANS AN INDIVIDUAL TAXPAYER WHO ,11
WHEN SELLING RESIDENTIAL REAL PROPERTY THAT THE TAXPAYER OWNS12
IN THE STATE, PROVIDES A BUY DOWN TO A HOMEBUYER .13
(e) "T
AX CREDIT" MEANS THE CREDIT AGAINST INCOME TAX14
CREATED IN THIS SECTION.15
(f) "T
AXPAYER" MEANS A PERSON SUBJECT TO TAX PURSUANT TO16
THIS ARTICLE 22.17
(3) (a) S
UBJECT TO THE LIMITATIONS SET FORTH IN SUBSECTION18
(3)(b)
OF THIS SECTION, FOR INCOME TAX YEARS COMMENCING ON OR19
AFTER JANUARY 1, 2024, BUT BEFORE JANUARY 1, 2026, A QUALIFIED20
SELLER IS ALLOWED A CREDIT AGAINST THE INCOME TAXES IMPOSED BY21
THIS ARTICLE 22 IN AN AMOUNT EQUAL TO FIFTY PERCENT OF THE LUMP22
SUM DOLLAR AMOUNT PAID BY THE QUALIFIED SELLER AT CLOSING TO BUY23
DOWN A HOMEBUYER 'S MORTGAGE INTEREST RATE.24
(b) T
O CLAIM THE TAX CREDIT, A QUALIFIED SELLER SHALL SUBMIT25
INFORMATION TO THE DEPARTMENT , IN A FORM AND MANNER REQUIRED26
BY THE DEPARTMENT , THAT DETAILS THE QUALIFYING MORTGAGE27
HB24-1144
-3- INTEREST RATE BUY DOWN . IN ADDITION TO OTHER INFORMATION1
REQUIRED BY THE DEPARTMENT , THIS INFORMATION MUST INCLUDE:2
(I) T
HE NUMBER OF PERCENTAGE POINTS BY WHICH THE INTEREST3
RATE OF THE MORTGAGE WAS REDUCED BY THE BUY DOWN ;4
(II) T
HE DOLLAR AMOUNT OF THE LUMP SUM PAID AT CLOSING TO5
BUY DOWN THE MORTGAGE INTEREST RATE ; AND6
(III) E
VIDENCE OF THE TRANSFER OF TITLE OF THE RESIDENTIAL7
PROPERTY FROM THE QUALIFIED SELLER TO THE HOMEBUYER .8
(4) I
F THE AMOUNT OF THE TAX CREDIT EXCEEDS THE TAXES DUE9
ON THE INCOME OF THE QUALIFIED SELLER FOR THE TAXABLE YEAR FOR10
WHICH THE CREDIT IS BEING CLAIMED, THE QUALIFIED SELLER MAY ELECT11
TO HAVE THE AMOUNT OF THE CREDIT NOT USED TO OFFSET INCOME TAXES12
IN THAT INCOME TAX YEAR REFUNDED TO THE QUALIFIED SELLER .13
(5) A
QUALIFIED SELLER MAY TRANSFER ALL OR A PORTION OF A14
TAX CREDIT ALLOWED PURSUANT TO SUBSECTION (3) OF THIS SECTION TO15
ANOTHER TAXPAYER FOR THE OTHER TAXPAYER , AS TRANSFEREE, TO16
APPLY AS A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE 2217
SUBJECT TO THE FOLLOWING LIMITATIONS :18
(a) T
AX CREDIT TRANSFERS PURSUANT TO THIS SUBSECTION (5)19
ARE SUBJECT TO ANY NOTICE AND VERIFICATION REQUIREMENTS20
DETERMINED BY THE DEPARTMENT ;21
(b) A
QUALIFIED SELLER OR A TRANSFEREE MAY ONLY TRANSFER22
THE PORTION OF THE TAX CREDIT THAT HAS NOT BEEN APPLIED AGAINST23
THE INCOME TAXES IMPOSED BY THIS ARTICLE 22 OR USED TO OBTAIN A24
REFUND; AND25
(c) A
NY TRANSFEREE OF A TAX CREDIT MAY USE THE AMOUNT OF26
THE TAX CREDIT TRANSFERRED TO OFFSET ANY OTHER TAX DUE UNDER27
HB24-1144
-4- THIS ARTICLE 22, OR THE TRANSFEREE MAY FREELY TRANSFER ANY1
PORTION OF THE TAX CREDIT THAT HAS NOT BEEN APPLIED AGAINST THE2
INCOME TAXES IMPOSED BY THIS ARTICLE 22 BY THE TRANSFEREE OR ANY3
OTHER TAXPAYER.4
(6) T
HE DEPARTMENT SHALL MAINTAIN A DATABASE OF5
INFORMATION ABOUT THE NUMBER AND VALUE OF TAX CREDITS CLAIMED6
AND ANY OTHER INFORMATION DETERMINED NECESSARY BY THE7
DEPARTMENT TO EVALUATE THE EFFECTIVENESS OF THE TAX CREDIT8
ALLOWED IN THIS SECTION IN ACHIEVING THE PURPOSES SET FORTH IN9
SUBSECTION (1)(a) OF THIS SECTION AND SHALL PROVIDE THIS10
INFORMATION, AND ANY OTHER INFORMATION THAT MAY BE NEEDED , TO11
THE STATE AUDITOR AS PART OF THE STATE AUDITOR 'S EVALUATION OF12
TAX EXPENDITURES UNDER SECTION 39-21-305.13
(7) P
URSUANT TO ARTICLE 4 OF TITLE 24, THE DEPARTMENT MAY14
PROMULGATE RULES FOR THE IMPLEMENTATION OF THIS SECTION .15
(8) T
HIS SECTION IS REPEALED, EFFECTIVE DECEMBER 31, 2033.16
SECTION 2. Act subject to petition - effective date -17
applicability. (1) This act takes effect at 12:01 a.m. on the day following18
the expiration of the ninety-day period after final adjournment of the19
general assembly; except that, if a referendum petition is filed pursuant20
to section 1 (3) of article V of the state constitution against this act or an21
item, section, or part of this act within such period, then the act, item,22
section, or part will not take effect unless approved by the people at the23
general election to be held in November 2024 and, in such case, will take24
effect on the date of the official declaration of the vote thereon by the25
governor.26
HB24-1144
-5- (2) This act applies to sales of residential real property that close1
on or after January 1, 2024.2
HB24-1144
-6-