State Rep. Thomas Caltagirone, D-Berks, and the House Urban Affairs Committee this week unanimously approved a bill that would give first-time homebuyers a tax deduction for money saved toward the purchase of a home.
“Creating more opportunities for residents to become homeowners will greatly help people in Berks County and across the commonwealth,” Caltagirone said. “Too many Pennsylvanians are faced with barriers to owning a home and the many benefits that come with it. I thank my fellow committee members for joining me in helping making homeownership more accessible.”
Jointly introduced by Reps. Rosemary Brown, R-Monroe, and Ryan Bizzarro, D-Erie, H.B. 128 would establish the First-Time Homebuyer Savings Account Act, allowing Pennsylvanians to open special savings accounts and take state tax deductions for eligible expenses such as a down payment and closing costs.
“Part of my job as Democratic chair of the Urban Affairs Committee is to improve housing and redevelopment opportunities in Pennsylvania,” Caltagirone said. “This bill would help address both issues by giving families an easier way to save for their first home while reducing the burden of things like down payments and closing costs.”
Account holders would be permitted to claim deductions for 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 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.
It’s estimated that allowing Pennsylvanians to establish first-time homebuyer savings accounts could result in an annual increase of up to 4,000 home purchases within the state, with the projected impact from economic activity, job creation and earnings reaching as high as $68.8 million.
The bill now heads to the full House for consideration.