New Jersey Assembly Bill A960

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Excludes gains on sales of certain real estate purchases from taxation under corporation business tax and gross income tax.

Impact

This legislation is expected to encourage more transactions in the real estate market by reducing the tax burden on profit made from eligible property sales. With the exclusion applying to properties not occupied by the taxpayer, the bill may motivate timely sales and investments, potentially revitalizing sections of the real estate market that may be stagnant. However, critics may argue that the exclusion could particularly benefit larger investors rather than small homeowners, raising equity concerns. The bill is positioned as a means of bolstering economic activity in the state by enhancing market fluidity and investment in real estate.

Summary

Assembly Bill A960 proposes to exclude gains from the sale of certain real estate purchases from taxation under both the corporation business tax and the gross income tax in New Jersey. The bill aims to stimulate real estate sales by creating a tax benefit for investors who purchase non-occupied, eligible properties. Specifically, the exclusion applies to gains on sales of property that have been held for over two years and were bought within a three-year window starting from the enactment date of the bill. The definition of eligible real estate is crucial, as it includes certain types of investment properties but does not extend to vacant land or property not actively on the market.

Contention

Debates surrounding Bill A960 may center on the implications of providing tax breaks that favor certain investment types. Proponents are likely to highlight the economic growth potential stemming from increased real estate activity, while opponents could argue against perceived inequities in tax policy favoring real estate investors over everyday citizens. The definition of what constitutes eligible properties and the duration of holding could also invite scrutiny, as stakeholders seek clarity on protections for small property owners and the implications for affordable housing markets.