Housing Materials Sales Tax Bill Awaits Senate Action

The legislature’s Housing Committee unanimously approved legislation Feb. 20 reducing the state sales tax for materials used in affordable housing projects.

SB 1262 is a CBIA-backed priority that cuts the sales tax to 3% for goods used in new housing projects that contain 20% affordable units or 50 affordable units.

CBIA’s Grace Brangwynne highlighted the relationship between housing inventory and workforce growth at a Feb. 13 public hearing.  

“Our workforce cannot grow unless people find a place to live,” Brangwynne told committee members. 

“SB 1262 addresses that problem because it creates an incentive-based approach to increasing inventory while also accommodating affordable units.”

Numerous housing advocacy organizations submitted testimony in support of the bill, including the Connecticut Association of REALTORS, the Homebuilders and Remodelers Association of Connecticut, the Connecticut Coalition of Property Owners, and the Connecticut Apartment Association.

According to the National Association of Homebuilders, framing materials alone on a new $428,000 construction would cost approximately $71,000.

Under SB 1262, builders could save about $2,400 on those materials through the reduced sales tax. 

CBIA supports housing proposals that address both the need to increase inventory and the growing cost of housing production. 

SB 1262 is now awaiting action in the Senate. 

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For more information, contact CBIA’s Grace Brangwynne (860.244.1163).