Bill > A4104

Introduced Session

This bill imposes an annual State tax on investment ownership of more than 20 single family residences in this State by certain entities for purposes other than for single family ownership. The revenue from the tax will be credited to the New Jersey Housing and Mortgage Assistance Agency to provide for down payment assistance for single family home ownership. The tax will serve as an economic disincentive to hedge funds and other investors from owning large portfolios of homes in this State, often obtained by large cash offers, and motivated primarily by long-term returns on investment. The holding of these homes in many developing, stable residential neighborhoods keeps them off of traditional residential markets that are accessible to family purchasers who must pursue standard down payments and purchase money mortgage financing during a tightening residential real estate market. Hedge funds are likely to hold a portfolio of residential properties for 5 to 10 years, but when they decide to sell, it is unlikely that those homes will show up on family accessible local real estate service platforms. Because the homes have been bundled, the hedge funds more likely will sell to other funds. This transforms residential properties into an asset class to be traded among institutional investors. Similar bundling is happening in cities to multi-family rental units, as private equity has been buying market-rate properties and raising rents. Once homes get bundled into a fungible asset, families are not going to be able to buy individual properties from that bundle. Some of those homes may become part of the rental market and will be unavailable to prospective homebuyers. To allow for an orderly exit from the housing investment market, this bill allows hedge funds and other investors to sell the homes they own for single family home ownership over a period of time, reducing their portfolio annually by at least 10 percent of the 20 or more homes they own at the start of a year, in order to avoid the annual tax at the end of the year. To ensure the tax focuses on problematic actors, the bill excludes nonprofit organizations, public government subsidized housing, as well as home builders. The bill includes a certification process for a purchaser to confirm that they do not own a majority interest in any other single family residential real estate. Grants provided by the New Jersey Housing and Mortgage Assistance Agency to provide for down payment assistance for single family home ownership from the tax revenue will prioritize support to families purchasing single-family residences from any taxpayer subject to the State tax.

AI Summary

Committee Categories

Katie Brennan (D)*, 

Introduced, Referred to Assembly Housing Committee (on 02/19/2026)

Official Document