Bill > S1440

Introduced Session

This bill increases the amounts excludable from gross income tax for gains from sales of principle residences. The limits on the excludable amounts are doubled from $250,000 to $500,000 for single filers and from $500,000 to $1,000,000 for joint filers. The current limits were incorporated into the New Jersey gross income tax law in 1998 and have not been changed since. The median United States home sale price from 2000 to 2022 has increased by 147 percent while inflation over the same period has risen by 67 percent. Home prices outpace inflation rates because homes are consistently in demand but are limited by strained supplies and finite amounts of land on which to build them. Qualifying for the exclusion is based on federal guidelines, which requires a taxpayer to have sold the taxpayer's principal residence in New Jersey and to meet the criteria under the Ownership Test, the Use Test, and the Additional Home Test. To satisfy the Ownership Test, a taxpayer must have owned the residence for two or more years during the five-year period ending on the sale date. To meet the Use Test, the taxpayer must have lived in the home as the taxpayer's principal residence for two or more years during the five-year period ending on the sale date. Finally, to satisfy the Additional Home Test, the taxpayer must not have excluded a gain from another home during the two-year period ending on the sale date. Several other federal requirements will continue to apply under this bill as under current law New Jersey law, but the total allowable exclusions will be doubled with a goal of allowing the maximum exclusion amounts to keep up with inflation and other factors that impact the average long-term growth in residential home sale prices.

Committee Categories

Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/09/2024)

Official Document