If you dream of someday owning your own home, you are not alone — many residents of Pennsylvania and the United States at large dream of this investment. However, purchasing a home for the first time has proved challenging for many individuals.
Representative Rosemary M. Brown (R-Monroe/Pike) understands this struggle for many Pennsylvanians, which is why she introduced House Bill 128 to establish first-time homebuyers savings accounts in the Commonwealth.
“A home, for most Pennsylvanians, symbolizes establishing their own roots and building a foundation of stability for themselves and their families,” says Brown. “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.”
Fortunately for potential first-time homeowners in PA, the House passed HB 128 on February 21, 2019. This legislation would create the “first-time homebuyers savings account program” that may open the door for new homebuyers.
The goal of this legislation is to help people save money to buy their first home. It would allow Pennsylvanians to set aside savings, which may be used as a deduction on state income tax, toward the eligible costs of purchasing a home. People who take advantage of the program will have money set aside that they can then use towards a down payment or deposit.
HB 128 would allow account holders to contribute a total of $50,000 over 10 years with an annual contribution cap of $5,000 for single taxpayers and $10,000 for those filing a joint tax return.
In the event the FHSA is not used within its expiry period or uses the money on an ineligible property, the entire amount withdrawn must be included in the account holder’s taxable income as interest income for the tax year the withdrawal was made.
Now the bill moves to the State Senate for consideration. If approved, this legislation can lead to an increase in as many as 4,000 additional home purchases annually and spur economic activity.
If you have questions when it comes to buying your first home, we can help! You can contact one of our experienced real estate agents with any questions you may have.
Sarah is a content writer and social media assistant with a BA in literature/creative writing from Wilkes University. When she’s not spending her days at work writing, reading, and drinking coffee, she’s usually at home reading, writing, and drinking coffee. She also devotes a fair amount of time to HGTV, drawing, and doting on her dog. As a creator, Sarah believes in emphasizing personality through design and DIY projects.