The state Senate recently approved legislation to create a First Time Homebuyers Savings Account in Pennsylvania.
Senate Bill 309 lets eligible Pennsylvanians open special savings accounts and take state tax deductions. The money could be used for expenses such as a down payment and closing costs.
The bill applies to first-time homebuyers and those who have not owned or purchased a home within the three years leading up to the purchase.
State Senator Doug Mastriano (R-33), is a supporter the measure.
“A first-time homebuyers savings account will become an important tool in helping people overcome the financial obstacles to homeownership,” said Mastriano. He estimates this type of savings account will result in an annual increase of up to 4,000 home purchases.
According to the National Association of Realtors, the share of first-time homebuyers nation-wide fell from 45% to 32% as a result of the 2009 financial crisis.
“Homeownership strengthens communities and provides stability for families,” said Mastriano. “Boosting homeownership would result in an overall positive impact on our state’s economy because it would spur job creation, economic activity and additional earnings for households. Forward-thinking legislation like this will help remove the barriers that are preventing people from buying their first home.”
The economic impact could range from $7.8 million to $68.8 million.
Account-holders could contribute a total of $50,000 over a 10-year period. The bill caps annual contributions at $5,000 for single taxpayers and $10,000 for those filing a joint return.
The Senate passed the bill unanimously on February 5. It now goes to the House of Representatives for consideration. A similar piece of legislation passed the Senate last session but did not receive action in the House.