The House Urban Affairs Committee unanimously approved Tuesday a bill that would give first-time home buyers a tax deduction for money saved toward the purchase of a home.
“Owning a home has been an elusive dream for too many young Pennsylvanians trapped in a cycle of renting and debt,” state Rep. Ryan Bizzarro (D-Erie), one of the bill’s prime sponsors, said. “But it doesn’t have to be that way. Homeownership and everything that goes along with it – financial stability, better credit, more predictable costs, and the homeowner’s tax deduction – should be an attainable goal for all Pennsylvanians, not just the wealthy. This bill would give families a leg up toward reaching that goal by making it easier for them to save and even encouraging family members who may have a little more disposable income to help.”
H.B. 128, introduced by state Rep. Ryan Bizzarro (D-Erie) and state Rep. Rosemary Brown (R-Monroe) would permit Pennsylvanians to open special savings accounts and take state tax deductions for eligible expenses such as a down payment and closing costs.
Under the First-Time Home Buyer Savings Account Act, account holders could claim deductions for a total of $50,000 over 10 years. Annual contributions would be capped at $5,000 for single taxpayers and $10,000 for those filing a joint return. The bill would apply to first-time home buyers as well as those who have not owned or purchased a home in the three years leading up to the purchase.
It is estimated, according to a press release from Bizzarro, that allowing Pennsylvanians to establish first-time home buyer savings accounts could increase the number of homes purchased in the state by 4,000 annually. The projected economic impact from the resulting additional economic activity, job creation and earnings could reach $68.8 million.
The bill now heads to the House chamber for further consideration.
Last October, an earlier version of the bill, H.B. 1981, passed the House by a vote of 189-1.