HARRISBURG – The state Senate recently approved legislation that would create a First Time Homebuyers Savings Account in Pennsylvania, according to State Senator Doug Mastriano (R-33), who supported the measure.
Senate Bill 309 would permit eligible Pennsylvanians to open special savings accounts and take state tax deductions for savings toward expenses such as a down payment and closing costs.
The bill would apply to first-time homebuyers and those who have not owned or purchased a home within the three years leading up to the purchase.
“A first-time homebuyers savings account will become an important tool in helping people overcome the financial obstacles to home ownership,” said Mastriano, noting that this type of savings account is estimated to result in an annual increase of up to 4,000 home purchases within the state.
According to the National Association of Realtors, the share of first-time homebuyers in the national home sale market fell from 45 percent to 32 percent, as a result of the 2009 financial crisis.
“Home ownership strengthens communities and provides stability for families,” said Mastriano. “Boosting home ownership would result in an overall positive impact 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 would be permitted to contribute a total of $50,000 over a 10-year period. Annual contributions would be capped at $5,000 for single taxpayers and $10,000 for those filing a joint return.
The Senate passed the bill unanimously February 5th, and it was referred 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.
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