Amends TCA Title 4; Title 13; Title 47; Title 48; Title 62; Title 66 and Title 67.

TAX PROCEEDS<br /> <br /> As of January 1, 2025, this bill requires all taxes, fees, and penalties collected pursuant to this bill to be deposited into a fund managed by the Tennessee housing development agency ("fund") that is used, in whole or in part, to issue grants or provide financial assistance to individuals or families for purposes of making a down payment on the purchase of a home. The state treasurer must invest monies in the fund in accordance with the law regarding the investment of state funds. The remaining balance of the fund at the end of a fiscal year does not revert to the general fund, but remains available for the purposes set forth in this bill. Interest accruing on investments and deposits of the fund must be credited to the fund, must not revert to the general fund, and must be carried forward in each subsequent fiscal year. <br /> <br /> This bill provides that 2 percent of the monies collected pursuant to this bill must be allocated to the Tennessee housing development agency ("agency") for administration of this bill.<br /> <br /> RULEMAKING<br /> <br /> This bill requires the agency to promulgate rules for purposes of establishing the parameters of the grant and financial assistance program and the qualifications of an individual or family entitled to a grant or financial assistance from the fund. <br /> <br /> TAX IMPOSED<br /> <br /> This bill provides that if a real estate investor owns more than 100 homes in this state, then the real estate investor is subject to a privilege tax of $20,000 per home that the investor owns in excess of 100 homes in accordance with this bill. All taxes assessed and collected in accordance with this provision must be deposited into the fund.<br /> <br /> This bill provides that if a real estate investor sells at least 10 percent of the total number of homes owned by the investor in excess of 100 homes in a tax year, or sells the number of homes owned by the investor in excess of 100 homes in a tax year, whichever is less, then the real estate investor is not subject to the privilege tax levied under this bill for that tax year. The real estate investor may continue to divest itself of homes year over year in accordance with this bill until the number of homes owned by the investor is 100 homes or less without incurring such tax. If, in a tax year, the investor does not comply with this provision before reducing the number of homes owned to 100 homes or less, then the investor is obligated to pay the privilege tax for that tax year and back taxes, with judgment interest, for each preceding tax year on homes owned in excess of 100 homes during the respective tax year beginning on or after January 1, 2025.<br /> <br /> For purposes of avoiding tax liability during a tax year under the above provision, the sale of a home by a real estate investor must be the sale of a home by the investor to one or more individuals who intend to use the home, or a dwelling unit of the home, as a primary residence. The sale of a home by a real estate investor to another real estate investor does not qualify as a sale for purposes avoiding tax liability.<br />