Indiana 2024 Regular Session

Indiana House Bill HB1176 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	HOUSE BILL No. 1176
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 5-20-11; IC 6-1.1-51.
7	7	Synopsis: Investor ownership of single family residences. Establishes
8	8	the housing down payment assistance fund. Establishes a tax of 50%
9	9	of the fair market value of a single family residence for each single
10	10	family residence acquired by an applicable taxpayer after the
11	11	applicable date. Establishes a maximum number of single family
12	12	residences that may be owned by an applicable taxpayer after the
13	13	applicable date for purposes of calculating an annual tax on any excess
14	14	single family residences.
15	15	Effective: July 1, 2024.
16	16	Harris
17	17	January 9, 2024, read first time and referred to Committee on Ways and Means.
18	18	2024 IN 1176—LS 6668/DI 137 Introduced
19	19	Second Regular Session of the 123rd General Assembly (2024)
20	20	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
21	21	Constitution) is being amended, the text of the existing provision will appear in this style type,
22	22	additions will appear in this style type, and deletions will appear in this style type.
23	23	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
24	24	provision adopted), the text of the new provision will appear in this style type. Also, the
25	25	word NEW will appear in that style type in the introductory clause of each SECTION that adds
26	26	a new provision to the Indiana Code or the Indiana Constitution.
27	27	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
28	28	between statutes enacted by the 2023 Regular Session of the General Assembly.
29	29	HOUSE BILL No. 1176
30	30	A BILL FOR AN ACT to amend the Indiana Code concerning
31	31	taxation.
32	32	Be it enacted by the General Assembly of the State of Indiana:
33	33	1 SECTION 1. IC 5-20-11 IS ADDED TO THE INDIANA CODE AS
34	34	2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
35	35	3 1, 2024]:
36	36	4 Chapter 11. Housing Down Payment Assistance Fund
37	37	5 Sec. 1. As used in this chapter, "authority" refers to the Indiana
38	38	6 housing and community development authority created by
39	39	7 IC 5-20-1-3.
40	40	8 Sec. 2. As used in this chapter, "fund" refers to the housing
41	41	9 down payment assistance fund established by section 3 of this
42	42	10 chapter.
43	43	11 Sec. 3. (a) The housing down payment assistance fund is
44	44	12 established for the purpose of providing down payment assistance
45	45	13 to buyers purchasing single family residences. The fund shall be
46	46	14 administered by the authority.
47	47	15 (b) The fund consists of:
48	48	16 (1) payments received for taxes assessed under IC 6-1.1-51-10
49	49	17 and IC 6-1.1-51-11;
50	50	2024 IN 1176—LS 6668/DI 137 2
51	51	1 (2) payments received for penalties assessed under
52	52	2 IC 6-1.1-51-15; and
53	53	3 (3) any federal funds received for the purpose of providing
54	54	4 down payment assistance to buyers purchasing single family
55	55	5 residences.
56	56	6 (c) The expenses of administering the fund shall be paid from
57	57	7 money in the fund.
58	58	8 (d) The treasurer of state shall invest the money in the fund not
59	59	9 currently needed to meet the obligations of the fund in the same
60	60	10 manner as other public money may be invested. Interest that
61	61	11 accrues from these investments shall be deposited in the fund.
62	62	12 (e) Money in the fund at the end of a state fiscal year does not
63	63	13 revert to the state general fund.
64	64	14 Sec. 4. The authority shall give priority in awarding assistance
65	65	15 from the fund to families seeking assistance to purchase a single
66	66	16 family residence that is sold or transferred by an applicable
67	67	17 taxpayer (as defined in IC 6-1.1-51-4).
68	68	18 Sec. 5. The authority shall adopt rules under IC 4-22-2 to
69	69	19 implement this chapter.
70	70	20 SECTION 2. IC 6-1.1-51 IS ADDED TO THE INDIANA CODE
71	71	21 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
72	72	22 JULY 1, 2024]:
73	73	23 Chapter 51. Taxes on Single Family Residences Owned by
74	74	24 Hedge Funds
75	75	25 Sec. 1. As used in this chapter, "applicable date" means either:
76	76	26 (1) December 31, 2024; or
77	77	27 (2) for a taxpayer who was not a hedge fund taxpayer in the
78	78	28 preceding taxable year, the last day of the taxable year in the
79	79	29 taxable year immediately preceding the taxable year in which
80	80	30 the taxpayer qualifies as a hedge fund taxpayer.
81	81	31 Sec. 2. (a) As used in this chapter, "applicable entity" means a
82	82	32 partnership, corporation, or real estate investment trust.
83	83	33 (b) The term does not include:
84	84	34 (1) an organization that is exempt from federal income
85	85	35 taxation under Section 501(c)(3) of the Internal Revenue
86	86	36 Code; or
87	87	37 (2) an organization primarily engaged in the construction or
88	88	38 rehabilitation of single family residences.
89	89	39 Sec. 3. As used in this chapter, "applicable single family
90	90	40 residence" means a single family residence that is acquired on or
91	91	41 before the applicable date.
92	92	42 Sec. 4. As used in this chapter, "applicable taxpayer" means an
93	93	2024 IN 1176—LS 6668/DI 137 3
94	94	1 applicable entity that:
95	95	2 (1) manages funds pooled from investors; and
96	96	3 (2) is a fiduciary with respect to the investors described in
97	97	4 subdivision (1).
98	98	5 Sec. 5. As used in this chapter, "department" means the
99	99	6 department of state revenue.
100	100	7 Sec. 6. As used in this chapter, "disqualified sale" means any
101	101	8 sale or transfer to:
102	102	9 (1) a corporation or other entity engaged in a trade or
103	103	10 business; or
104	104	11 (2) an individual who owns any other single family residence
105	105	12 at the time of such sale or transfer.
106	106	13 Sec. 7. As used in this chapter, "hedge fund taxpayer" means,
107	107	14 with respect to any taxable year, an applicable taxpayer that has
108	108	15 fifty million dollars ($50,000,000) or more in net value or assets
109	109	16 under its management on any day during the taxable year.
110	110	17 Sec. 8. (a) As used in this chapter, "single family residence"
111	111	18 means a residential property consisting of one (1) to four (4)
112	112	19 dwelling units.
113	113	20 (b) The term does not include:
114	114	21 (1) an unoccupied single family residence acquired through
115	115	22 foreclosure;
116	116	23 (2) a single family residence that is:
117	117	24 (A) not rented or leased; and
118	118	25 (B) used as the principal residence of a person who has an
119	119	26 ownership interest in the applicable taxpayer; or
120	120	27 (3) a single family residence constructed, acquired, or
121	121	28 operated with federally appropriated funding sources.
122	122	29 Sec. 9. (a) For purposes of this chapter, an applicable taxpayer
123	123	30 shall be treated as acquiring a single family residence if the
124	124	31 applicable taxpayer acquires a majority ownership interest in the
125	125	32 single family residence, regardless of the percentage of the
126	126	33 ownership interest.
127	127	34 (b) For purposes of this chapter, an applicable taxpayer shall be
128	128	35 treated as owning a single family residence if the applicable
129	129	36 taxpayer owns a majority interest in the single family residence,
130	130	37 regardless of the percentage of the ownership interest.
131	131	38 Sec. 10. Each single family residence acquired by an applicable
132	132	39 taxpayer after the applicable date is subject to a tax equal to fifty
133	133	40 percent (50%) of the fair market value of the single family
134	134	41 residence.
135	135	42 Sec. 11. (a) If the number of applicable single family residences
136	136	2024 IN 1176—LS 6668/DI 137 4
137	137	1 owned by an applicable taxpayer as of the last day of the taxable
138	138	2 year is more than the maximum permissible units under section 12
139	139	3 of this chapter, the applicable taxpayer is subject to a tax equal to
140	140	4 the amount determined in STEP FOUR of the following formula:
141	141	5 STEP ONE: Determine the number of applicable single family
142	142	6 residences owned by the taxpayer as of the last day of the
143	143	7 taxable year.
144	144	8 STEP TWO: Determine the sum of:
145	145	9 (A) zero (0), in the case of a hedge fund taxpayer; or
146	146	10 (B) fifty (50), in the case of any other applicable taxpayer;
147	147	11 plus the maximum permissible units for the taxable year.
148	148	12 STEP THREE: Divide the number determined in STEP ONE
149	149	13 by the number determined in STEP TWO.
150	150	14 STEP FOUR: Determine the product of:
151	151	15 (A) the number determined in STEP THREE; multiplied
152	152	16 by
153	153	17 (B) fifty thousand dollars ($50,000).
154	154	18 (b) A single family residence that is sold or transferred in a
155	155	19 disqualified sale during a taxable year shall be treated as a single
156	156	20 family residence that is owned by the applicable taxpayer as of the
157	157	21 last day of the taxable year.
158	158	22 (c) All persons which are treated as a single employer under
159	159	23 Section 52(a) or Section 52(b) of the Internal Revenue Code shall
160	160	24 be treated as a single applicable taxpayer.
161	161	25 Sec. 12. The maximum permissible units for a taxable year is
162	162	26 calculated as follows:
163	163	27 (1) For the first full taxable year beginning after the
164	164	28 applicable date, the following:
165	165	29 (A) For a hedge fund taxpayer, ninety percent (90%) of the
166	166	30 number of applicable single family residences owned by
167	167	31 the hedge fund taxpayer on the applicable date.
168	168	32 (B) For any other applicable taxpayer, fifty (50) plus ninety
169	169	33 percent (90%) of the number of applicable single family
170	170	34 residences owned by the applicable taxpayer on the
171	171	35 applicable date.
172	172	36 (2) For the second taxable year beginning after the applicable
173	173	37 date, the following:
174	174	38 (A) For a hedge fund taxpayer, eighty percent (80%) of the
175	175	39 number of applicable single family residences owned by
176	176	40 the hedge fund taxpayer on the applicable date.
177	177	41 (B) For any other applicable taxpayer, fifty (50) plus eighty
178	178	42 percent (80%) of the number of applicable single family
179	179	2024 IN 1176—LS 6668/DI 137 5
180	180	1 residences owned by the applicable taxpayer on the
181	181	2 applicable date.
182	182	3 (3) For the third taxable year beginning after the applicable
183	183	4 date, the following:
184	184	5 (A) For a hedge fund taxpayer, seventy percent (70%) of
185	185	6 the number of applicable single family residences owned
186	186	7 by the hedge fund taxpayer on the applicable date.
187	187	8 (B) For any other applicable taxpayer, fifty (50) plus
188	188	9 seventy percent (70%) of the number of applicable single
189	189	10 family residences owned by the applicable taxpayer on the
190	190	11 applicable date.
191	191	12 (4) For the fourth taxable year beginning after the applicable
192	192	13 date, the following:
193	193	14 (A) For a hedge fund taxpayer, sixty percent (60%) of the
194	194	15 number of applicable single family residences owned by
195	195	16 the hedge fund taxpayer on the applicable date.
196	196	17 (B) For any other applicable taxpayer, fifty (50) plus sixty
197	197	18 percent (60%) of the number of applicable single family
198	198	19 residences owned by the applicable taxpayer on the
199	199	20 applicable date.
200	200	21 (5) For the fifth taxable year beginning after the applicable
201	201	22 date, the following:
202	202	23 (A) For a hedge fund taxpayer, fifty percent (50%) of the
203	203	24 number of applicable single family residences owned by
204	204	25 the hedge fund taxpayer on the applicable date.
205	205	26 (B) For any other applicable taxpayer, fifty (50) plus fifty
206	206	27 percent (50%) of the number of applicable single family
207	207	28 residences owned by the applicable taxpayer on the
208	208	29 applicable date.
209	209	30 (6) For the sixth taxable year beginning after the applicable
210	210	31 date, the following:
211	211	32 (A) For a hedge fund taxpayer, forty percent (40%) of the
212	212	33 number of applicable single family residences owned by
213	213	34 the hedge fund taxpayer on the applicable date.
214	214	35 (B) For any other applicable taxpayer, fifty (50) plus forty
215	215	36 percent (40%) of the number of applicable single family
216	216	37 residences owned by the applicable taxpayer on the
217	217	38 applicable date.
218	218	39 (7) For the seventh taxable year beginning after the applicable
219	219	40 date, the following:
220	220	41 (A) For a hedge fund taxpayer, thirty percent (30%) of the
221	221	42 number of applicable single family residences owned by
222	222	2024 IN 1176—LS 6668/DI 137 6
223	223	1 the hedge fund taxpayer on the applicable date.
224	224	2 (B) For any other applicable taxpayer, fifty (50) plus thirty
225	225	3 percent (30%) of the number of applicable single family
226	226	4 residences owned by the applicable taxpayer on the
227	227	5 applicable date.
228	228	6 (8) For the eighth taxable year beginning after the applicable
229	229	7 date, the following:
230	230	8 (A) For a hedge fund taxpayer, twenty percent (20%) of
231	231	9 the number of applicable single family residences owned
232	232	10 by the hedge fund taxpayer on the applicable date.
233	233	11 (B) For any other applicable taxpayer, fifty (50) plus
234	234	12 twenty percent (20%) of the number of applicable single
235	235	13 family residences owned by the applicable taxpayer on the
236	236	14 applicable date.
237	237	15 (9) For the ninth taxable year beginning after the applicable
238	238	16 date, the following:
239	239	17 (A) For a hedge fund taxpayer, ten percent (10%) of the
240	240	18 number of applicable single family residences owned by
241	241	19 the hedge fund taxpayer on the applicable date.
242	242	20 (B) For any other applicable taxpayer, fifty (50) plus ten
243	243	21 percent (10%) of the number of applicable single family
244	244	22 residences owned by the applicable taxpayer on the
245	245	23 applicable date.
246	246	24 (10) For a taxable year beginning more than nine (9) years
247	247	25 after the applicable date, the following:
248	248	26 (A) For a hedge fund taxpayer, zero (0) applicable single
249	249	27 family residences.
250	250	28 (B) For any other applicable taxpayer, fifty (50) applicable
251	251	29 single family residences.
252	252	30 Sec. 13. The amounts collected for:
253	253	31 (1) a tax assessed under sections 10 and 11 of this chapter;
254	254	32 and
255	255	33 (2) a penalty assessed under section 15 of this chapter;
256	256	34 must be transferred to the housing down payment assistance fund
257	257	35 established by IC 5-20-11-3.
258	258	36 Sec. 14. (a) The department shall require such reporting as the
259	259	37 department deems necessary or appropriate to carry out the
260	260	38 purposes of this chapter, which must include:
261	261	39 (1) the dates on which single family residences owned by an
262	262	40 applicable taxpayer were acquired by the applicable
263	263	41 taxpayer; and
264	264	42 (2) whether a person acquiring a single family residence from
265	265	2024 IN 1176—LS 6668/DI 137 7
266	266	1 an applicable taxpayer owns any other single family
267	267	2 residences at the time of the acquisition.
268	268	3 (b) The reporting required under subsection (a)(2) must include
269	269	4 a certification from each person to whom a single family residence
270	270	5 is sold or transferred from an applicable taxpayer. The
271	271	6 certification must be signed by the purchaser or transferee and
272	272	7 state:
273	273	8 (1) the name and address of the purchaser or transferee;
274	274	9 (2) that the sale is not a disqualified sale; and
275	275	10 (3) that the purchaser or transferee will be subject to the
276	276	11 penalty imposed under section 15 of this chapter for any false
277	277	12 certification.
278	278	13 Sec. 15. (a) An applicable taxpayer that fails to report the
279	279	14 information required under section 14 of this chapter or fails to
280	280	15 include correct information in a report shall pay a penalty of
281	281	16 twenty thousand dollars ($20,000) to the department.
282	282	17 (b) A penalty may not be assessed under subsection (a) if it is
283	283	18 shown that an applicable taxpayer's failure to report the
284	284	19 information required under section 14 of this chapter is due to
285	285	20 reasonable cause and not to willful neglect.
286	286	21 (c) Not later than January 31, 2025, the department shall
287	287	22 publish a form on its website to be used for calculating the amount
288	288	23 of tax owed under this chapter.
289	289	2024 IN 1176—LS 6668/DI 137