HARRISBURG – The Pennsylvania State Senate this week passed a bill to allow individuals to open first-time homebuyer savings account with a financial institution, according to Senator Cris Dush (R-25), who supported the bill.
“Home ownership strengthens communities and provides stability for families,” said Senator Dush. “A first-time homebuyers savings account will be an important tool in helping people overcome the financial obstacles to home ownership.”
Senate Bill 157 would allow individuals to open an account of up to $150,000 with a financial institution of their choice for the sole purpose of purchasing a first home. Funds from a first-time homebuyer savings account may only be used to pay or reimburse the eligible costs for the purchase of a single-family home in Pennsylvania.
Since 2009, the number of first-time homebuyers has significantly decreased. According to the National Association of Realtors, the share of first-time homebuyers in the national home sale market has fallen from 45% to just over 32%.
Individuals taking advantage of a first-time homebuyers savings account will be able to deduct up to $5,000 on their individual taxes, or up to $10,000 for a joint account. The tax deduction can be for no longer than 10 years and may not exceed $50,000 within a ten-year period. Unused funds would be counted against an individual’s taxable income.
The bill now goes to the House of Representatives for consideration.
CONTACT: Zack Ankeny