|BILL AS INTRODUCED||2007-2008|
Introduced by Representatives Donovan of Burlington and Turner of Milton
Subject: Taxation; land gains tax; exemption for transfers to nonprofit housing developers
Statement of purpose: This bill proposes to exempt a transfer to a nonprofit housing organization if the organization then sells the property to a low or moderate income buyer as a principal residence within 12 months.
AN ACT RELATING TO LAND GAINS TAX EXEMPTION FOR TRANSFER TO NONPROFIT HOUSING ORGANIZATION
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 32 V.S.A. § 10011 is amended to read:
Notwithstanding sections 10001 and
10003 of this title, in the case of a sale or exchange of land to an
organization that qualifies under
section Section 501(c)(3) of
the Internal Revenue Code and also meets the “public support” test of section
Section 509(a)(2) of the Code , if:
(1) If one of the stated purposes of the organization is to provide affordable housing and if the land will be held for this purpose for at least six years following the sale, then one-half of the tax otherwise imposed under this chapter shall be due. If the land is not held for affordable housing purposes for at least six years following the transfer, the tax which would have been due from the seller or transferor shall become due from such organization for that portion of the property not so held. In cases coming within this section, the commissioner may require the seller or transferor to file a land gains tax return at the time of the sale or exchange, in order to establish the amount of tax which will become the tax liability of such organization in such case; and
(2) If within 12 months of the sale to the organization, the organization will sell the land to a buyer as the buyer’s principal residence, none of the tax otherwise imposed under this chapter on the transfer to the organization shall be due. If the land is not sold within 12 months to a buyer as the buyer’s principal residence, the tax which would have been due upon transfer to the qualified organization shall become due from such organization, unless the exemption under subdivision (1) of this section applies. In transfers to an organization exempted under this subdivision, the commissioner may require the seller or transferor to file a land gains tax return at the time of the sale or exchange, in order to establish the amount of tax which may become due.
Sec. 2. EFFECTIVE DATE
This act shall apply to transfers on or after July 1, 2007.
The Vermont General Assembly
115 State Street