Sen. Wayne Fontana (D-Allegheny) is helping to lead the effort to boost first-time home ownership across Pennsylvania. Last week, he introduced a resolution declaring June as “Homeownership Month” in Pennsylvania and noted that “owning a home is an essential part of the American dream.”
The ranks of first-time homebuyers have dropped from 45 percent of the national home market to 32 percent since the start of the Great Recession in 2009.
Fontana, who was previously a Realtor® and a member of PAR, said during our Real Estate Caucus meeting that he sees this as a troubling trend for all that we know about the positive benefits of home ownership. He added that owning a home is a good investment for families, and it makes for more stable and safer neighborhoods.
I’d like to commend Sen. Fontana for the resolution.
And PAR is even more excited and hopeful for the prospect of the General Assembly giving Pennsylvanians a tangible tool to help them achieve this part of the American dream. We have bipartisan support of the proposed First-Time Homebuyers Savings Account program. It’s truly a great opportunity for homebuyers throughout the state.
Earlier this year, Fontana and Sen. Bob Mensch (R-Bucks/Montgomery) introduced Senate Bill 1066, which would create the First-Time Homebuyers Savings Account program. The Senate bill unanimously passed the Urban Affairs & Housing Committee, on which Fontana serves as minority chair. Similar legislation was introduced as House Bill 1981 by Rep. Ryan Bizzarro (D-Erie) and Rep. Rosemary Brown (R-Monroe).
The legislation would allow first-time homebuyers or buyers re-entering the housing market to set up 10-year tax-deductible savings accounts for purchasing a home. Parents and grandparents also would be eligible to contribute to these accounts on behalf of children and grandchildren.
Fontana said he sponsored the legislation because it will benefit consumers and communities alike. It would help consumers overcome hurdles to homeownership, such as low salaries and college debt that can make it difficult to save for a down payment.
Money saved under the program – up to $50,000 – would qualify as a tax deduction on state income tax. Any money not used for a home purchase would be taxable and would incur a 10 percent penalty.
Individuals who do not use the account to buy a house, or if they end up using the money for something other than a home purchase, will be responsible for paying the taxes and a penalty on the money. With this bill, we would protect taxpayers while giving new homebuyers across Pennsylvania a strong incentive to invest in their futures.
The program could boost home sales by 4,000 per year across Pennsylvania while delivering an economic impact of up to $68.8 million. In a survey, more than 80 percent of Pennsylvanians said the First-Time Homebuyers Savings Account would be beneficial to the state.
For more information about the First-Time Homebuyers Savings Account, visit FirstHomePA.com.