Act 250 Overhaul (H.687) - May 7, 2024

Chairwoman Kornheiser opened the Tuesday House Ways & Means Committee meeting by sharing the Representative Demrow had a suggested amendment to the housing and Act 250 bill, H.687, which the Committee had some jurisdiction over.

Legislative counsel began walking through the amendment, which cleans up some definitions and sets a higher property transfer tax (PTT) on second homes than the Senate version, but also exempts the first $200k of a primary residence (current law only exempts $110k) for subsidized homes. For non-subsidized homes, the first $200k would be taxed at 0.5%.

Kornheiser noted that they are “proud we were lowering the cost of PTT for average homes, and we are able to raise more money to put towards affordable housing… That makes it a stronger proposal.  And the Tax Department felt uncomfortable implementing the Senate version.”

The amendment also increases the clean water surcharge from 0.2% to 0.22% but exempted the first $250K in home value for a subsidized home and $200k for a subsidized one.

There was some additional conforming language and reallocation of funds collected by the PTT. However, significantly, two new exemptions to the PTT were created. The first would exempt abandoned properties that are being transferred for the purposes for rehabilitation and transfers (sales) of new mobile homes that are more energy efficient.

They also deleted the property value freeze for properties being rehabilitated. This was meant to freeze the grand list value of the property for five years following the rehab project. The Committee discussed the potential impacts of this program with the Joint Fiscal Office. They were estimated at $1.16M for FY26 and increased to $3.9M in FY28.

The Committee took a straw poll on the amendment and it was 7-5 in favor.

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