Legislation would establish savings accounts for first-time homebuyers

A bill that would establish savings accounts for first-time homebuyers recently passed the Senate.

The Pennsylvania First-Time Home Buyer Savings Account Act would allow eligible Pennsylvanians to open special savings accounts to be used for the purchase of a home. The bill also allows for individuals to take state tax deductions for savings toward expenses such as closing costs or a down payment.

To be eligible, residents must be first-time homebuyers or have not owned or purchased a home in the three years leading up to the purchase.

Contributions could be made to savings accounts over a 10-year period and up to $50,000. There would be an annual contribution cap of $5,000 for single taxpayers and $10,000 for those filing jointly.

“The benefits of home ownership extend beyond the home and the buyer,” Sen. Bob Mensch (R-Montgomery, Bucks and Berks counties), who sponsored the bill, said. “Homeowners put down stakes and make a long-term commitment that strengthens the entire community, socially and economically. Providing these tax credits would bring a significant return to our communities.”

The program is estimated to result in up to 4,000 more homes purchased annually statewide, Mensch said, an economic impact of up to $68.8 million.