2022 Connecticut General Statutes
Title 12 - Taxation
Chapter 229 - Income Tax
Section 12-724a. (Formerly Sec. 12-62s). - Homeownership incentive program. Income tax exemption for owners of owner-occupied homes and eligible renters within homeownership incentive tract.

(a) For purposes of this section:

(1) “Owner-occupied home” means a building containing three or fewer dwelling units, one of which units is occupied as a primary residence by the owner of the building or, with respect to a common interest community, as defined in section 47-202, “owner-occupied home” means a dwelling unit occupied as a primary residence by the owner of the unit, within a common interest community containing three or fewer dwelling units; and

(2) “Eligible renter” means a person leasing and occupying a dwelling unit as a primary residence who graduated from a four-year college, provided such person graduated not earlier than two years prior to the date a lease is signed.

(b) A municipality that has adopted the property tax system under section 12-62r shall institute a program to promote homeownership in certain areas of such municipality. Such program shall be applicable to two or more designated census tracts that have owner-occupied home rates of fifteen per cent or less and shall provide an exemption from personal income taxes for the owners of owner-occupied homes and for eligible renters within such designated census tracts. For purposes of this subsection, “census tract” means a census tract as determined in accordance with the most recent United States census.

(c) A municipality required to proceed under this section shall determine which of the census tracts within such municipality have a number of owner-occupied homes equaling fifteen per cent or less of the dwelling units in such census tract and shall designate two or more of such census tracts as a homeownership incentive tract.

(d) The Department of Revenue Services shall exempt each owner of an owner-occupied home and each eligible renter within a homeownership incentive tract from the taxes due under chapter 229, other than the liability imposed by section 12-707, provided such owner and eligible renter shall continue to be eligible for the credit under section 12-704e. Such tax exemption shall be available to each eligible renter who occupies a dwelling unit within a homeownership incentive tract as a primary residence. The municipality shall provide the department with any information needed by the department to allow such exemption.

(e) The tax exemption offered to owners of owner-occupied homes and eligible renters within a homeownership incentive tract pursuant to this section shall continue until the number of owner-occupied homes within such homeownership incentive tract meets or exceeds forty-nine per cent of the dwelling units in such tract. Upon reaching such percentage, the municipality shall notify such owners and eligible renters and the Department of Revenue Services, and the exemption allowed pursuant to this section shall phase out over a five-year period. Owners of an owner-occupied home and eligible renters within such homeownership incentive tract shall be liable for twenty per cent of the income tax otherwise due, as described in subsection (d) of this section, in the first taxable year commencing after the forty-nine-per-cent goal is reached, and shall be liable for an additional twenty per cent each year thereafter, until such owner and eligible renter is liable for all income taxes owed. The municipality shall provide the department with any information needed by the department to process such phase-out.

(P.A. 14-174, S. 3; P.A. 22-146, S. 8.)

History: P.A. 14-174 effective July 1, 2015; P.A. 22-146 replaced references to census blocks and homeownership incentive blocks with references to census tracts and homeownership incentive tracts, amended Subsec. (b) to add “or more” re applicability of program, delete provision re property tax abatement, replace definition of “census block” with definition of “census tract” and make a technical change, amended Subsec. (c) to add “or more” re designation of census tracts as homeownership incentive tract and delete provision re property tax abatement, and amended Subsec. (e) to add reference to Department of Revenue Services, delete provisions re charging owner of owner-occupied home a percentage of property taxes and make conforming changes; Sec. 12-62s transferred to Sec. 12-724a in 2023.