Keeping homeownership within reach for Pennsylvanians is one of the reasons Rep. Ryan Bizzarro (D-Erie) co-sponsored HB 1981, which would create a First-Time Homebuyers Savings Account Program in Pennsylvania. He discussed the program during a press conference held in a newly renovated single-family home in Erie last week.
“My bill would give first-time homebuyers a leg up by allowing them to claim a state tax deduction for certain savings they make toward the purchase of a single-family home,” Bizzarro said. “I introduced this bill because I believe that the benefits of homeownership should be available to all Pennsylvanians, not just those who are wealthier or better established.”
The bill, co-sponsored by Rep. Rosemary Brown (R-Monroe) was voted out of the House Urban Affairs Committee last week. Senate Bill 1066 (Mensch, R-Montgomery/Fontana, D-Allegheny) is expected to be considered by the Senate Urban Affairs Committee in the coming weeks.
Bizzarro was joined at the conference by Erie Realtor® Stacey Stanos, who said, “I work with many young clients who see the value of owning their own home. They believe buying a home is a good financial decision and provides a safe, stable place for their families. But so many of them struggle to pay the additional costs associated with buying a first home.”
Since the 2009 financial crisis, the share of first-time homebuyers in the national home sale market has fallen from 45 percent to just 32 percent.
Sean Calhoun, an Erie native, also spoke during the press conference. He said while homeownership is part of his plan for the future, it’s a challenge to save enough money for a down payment. “Receiving a deduction on state income taxes from a First-Time Homebuyers Savings Account would make it a little easier for younger people to put something aside every year, and would motivate us to keep saving. If this bill becomes law, I believe it will bring many of us one step closer to realizing our hopes of becoming homeowners.”
For prospective homebuyers, the program would help them 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 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.
The program is projected to boost home sales by up to 4,000 per year across Pennsylvania while delivering an economic impact of up to $68.8 million. Bizzarro noted that a single home sale, on average, creates a $52,000 economic impact, according to the National Association of Realtors®.
An economic study of the program estimates the increase in state tax revenues collected from realty transfer taxes, income taxes on increased earnings and sales taxes on increased consumption would exceed tax revenue due to the FHSA deductions.
For more information about the First-Time Homebuyers Savings Account, visit FirstHomePA.com.