Allows gross income tax deduction for functional improvements and home repairs made to taxpayer's primary residence.

S3730

SENATE, No. 3730

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 5, 2026

Sponsored by:

Senator� ANTHONY M. BUCCO

District 25 (Morris and Passaic)

SYNOPSIS

���� Allows gross income tax deduction for functional
improvements and home repairs made to taxpayer�s primary residence.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
allowing a gross income tax deduction for expenses
related to functional improvements and home repairs made to a primary
residence, and supplementing chapter 3 of Title 54A of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.�� A taxpayer shall be
allowed to deduct from the taxpayer�s gross income the amounts paid by the
taxpayer during the taxable year for functional improvement expenses or repair
and maintenance expenses.

���� b.��� In the case of married
individuals who file separately, each individual shall be permitted to claim
one-half of the deduction allowed pursuant to this section for amounts paid in
connection with a primary residence occupied by both individuals during the
taxable year.�

���� c.���� As used in this
section:

���� �Functional improvement
expense� means an amount paid by a taxpayer for expenses incurred for the
purpose of materially improving the operating condition, and considerably
prolonging the useful life, of the primary residence of the taxpayer.� This
term is distinguished from, and does not include, work performed that adapts
all or part of a residence for new uses, remodels a residence for aesthetic
purposes, or does not concern an essential aspect of the habitability of a
residence.

���� �Primary residence� means a
residence, located in the State, that is actually and continually occupied by a
taxpayer as the permanent residence of the taxpayer; this includes, but is not
limited to, a mobile home or a residential unit within a cooperative or mutual
housing corporation.� This term is distinguished from, and does not include, a
vacation home or other secondary real property.�

���� �Repair and maintenance
expense� means an amount paid by a taxpayer for expenses incurred for the
purpose of keeping the primary residence of the taxpayer in an ordinarily
efficient operating condition.� This term is distinguished from, and does not
include, work performed that adapts all or part of a residence for new uses,
remodels a residence for aesthetic purposes, or does not concern an essential
aspect of the habitability of a residence.

���� 2.��� This act shall take
effect immediately and shall apply to taxable years beginning on or after the
January 1 next following the date of enactment.

STATEMENT

���� This bill provides State
taxpayers with a gross income tax deduction for functional improvements and
repair and maintenance performed on a taxpayer�s primary residence.�

���� Specifically, a taxpayer may
claim a deduction for all: �functional improvement expenses� paid by the
taxpayer for expenses incurred for the purpose of considerably prolonging the
useful life of the taxpayer�s primary residence and materially improving the
operating condition of the taxpayer�s primary residence; and for all �repair
and maintenance expenses� paid by the taxpayer for work performed on that
taxpayer�s primary residence in order to maintain the property in an ordinarily
efficient operating condition.� The term �primary residence� means a residence
located in this State that is actually and continually occupied as a taxpayer�s
permanent residence, including mobile homes and co-op units.� Improvements that
adapt all or part of a residence for new uses (
e.g.
, renovating a
basement), remodel an aspect of a residence for aesthetic purposes, or that do
not concern an essential aspect of the habitability of the residence do not
qualify for this deduction.

���� The gross income tax deduction
made available by this bill covers expenses incurred by a property owner or a
property renter.

���� This bill does not impose a
limit on the amount of expenses that may be claimed by a taxpayer for a taxable
year.� However, if a married couple files separate tax returns, they each may claim
half of the same functional improvement or repair and maintenance expense.� This
mechanism allows both spouses to benefit from the deduction made available by
this bill while avoiding potential �double-dipping.�

���� This bill eases the burdens
placed on New Jersey taxpayers associated with maintaining a home.� By offering
this gross income tax deduction, this bill encourages investing in our homes,
promotes the safety and welfare of our communities, and encourages more
individuals to reside in this State.