The state House advanced last week legislation that would establish first-time homebuyers savings accounts.
Pennsylvanians would be permitted to contribute $50,000 over a 10-year time period to the accounts with an annual cap of $5,000 for those who file as a single tax return and $10,000 for those who file a joint tax return.
The entire amount withdrawn must be included as interest income for the tax year the withdrawal was made if an account holder or beneficiary withdraws any amount from the account that is used for purposes other than the costs eligible under this act or uses the property as an ineligible use. Funds also are taxable if not used after the 10-year expiration date.
“A home, for most Pennsylvanians, symbolizes establishing their own roots and building a foundation of stability for themselves and their families,” Rep. Rosemary M. Brown (R-Monroe/Pike), who introduced the bill, said. “Purchasing a home today has become more and more difficult for Pennsylvanians, which is why I introduced this legislation as it would act as a tool to help people plan and save money toward a home purchase.”
Home purchases would increase by up to 4,000 houses annually, according to the House Republican Caucus.
The bill now moves to the Senate floor for further consideration.