Connecticut residents testify in favor of renter’s tax credit

Supporting renters supports our communities

Connecticut needs to take action to create a tax system that is fair to renters.

The cost-of-living crisis is hurting working class people across the state. That’s why both renters and homeowners urged the Connecticut legislature’s finance, revenue, and bonding committee on Monday to support and pass the renter’s tax credit included in House Bill 5114.

“I recently had some conversations with folks in my town who cannot afford to rent here anymore,” Marie, who lives in Hamden, testified. “Some are elderly people looking for a one-bedroom apartment but can’t afford the rent hikes. Some are young professionals who still live with their parents because they cannot afford to rent. Some are divorced couples who have to live in the same place because they cannot afford the costs to live separately. Please support this bill to change the lives of Connecticut residents who need it the most. The working class is the backbone of the state.”

A renter’s tax credit acknowledges that renters are important contributors to our communities. It’s also about fairness: currently in Connecticut, homeowners can get tax breaks, and most renters can’t.

The Connecticut Renter’s Tax Credit would:

• be refundable
• be for all renters making up to $75,000 per year (working class people)
• be based on how much someone pays in rent and how much they make each year, with the credit capped at $2,500 per household
• include protections to prevent landlords from knowing how much renters get back.

Currently in Connecticut, tenants are being forced to take on their landlord’s property taxes, because those costs are passed on to them – it’s estimated that 20% of people’s rent goes toward their landlords’ property taxes, according to the Connecticut Department of Revenue Services. A renter’s tax credit makes things fairer by giving renters some relief.

Jen used to be able to afford a home because of the tax credits she received for the interest on her mortgage. But when she moved to Milford so her son could go to a better high school, she could no longer afford to own a house and was forced to rent.

“Most single moms like me can’t afford to buy a house in Connecticut,” she testified. “The State of Connecticut should support families who do not have the means to purchase a home due to the high cost of living in this state. One way to support families is through HB-5114, so families who already struggle with the cost of living can have a little relief.”

In Connecticut, half of renters and nearly one in three homeowners are considered “cost burdened” by the cost of housing. About one in six renters spend half of their income on housing. People are struggling. Connecticut’s legislators need to take action on the state’s affordable housing crisis before people are priced out of their communities.

People across the state have shared their stories of how the price of rent has hurt them. Some have told us that they’ve been forced to sell their car to pay rent, were forced to move in with family to make ends meet, and taken on debt. While many people dream of buying a house, it’s becoming harder to achieve that dream.

“I would love to be able to own my home, but due to the circumstances, this is not an option for me,” Tracy, in Shelton, told us. “I don’t have money to pay daily living costs due to rent being so high.”

The Connecticut Project Action Fund supports a renter’s tax credit like the one included in H.B. 5114. The state needs a tax system that is fair to renters and gives them a financial boost to help with costs.

“Connecticut is facing a growing housing affordability crisis, and renters — particularly low- and moderate-income households — are bearing the brunt of it,” Sana Shah, the director of policy and advocacy, told the committee. “A refundable renter’s tax credit is a practical, evidence-based policy that helps close a longstanding gap in our tax system, provides relief to households struggling with rising housing costs, and complements existing housing assistance programs that reach only a fraction of eligible households.”

Working class people need help now. The legislature needs to hear your voice and know your story. Join us to take action to tell lawmakers to pass a renter’s tax credit.