State Senators Theresa Gavarone, R-Bowling Green, and Bob Peterson, R-Washington Court House, today introduced Senate Bill 139, also referred to as the “First-Time Home Buyer Savings Act.”
The legislation will create a new type of savings account that future buyers can use for the purchase of their first home.
The law will first require a savings account be opened at any financial institution in the state. Once opened, the account holder(s) can begin contributing. Up to $5,000 for single tax filers and $10,000 for joint filers, plus accrued interest, will be tax deductible each year.
“With rising cost of rent and student loan debt, saving enough money for even a modest down payment is nearly impossible for many new home buyers,” Gavarone said. “Our legislation will give this, and future generations, a head start on saving enough money to make homeownership a reality instead of a dream.”
Modeled after legislation currently in law in at least eight states, the money deposited into the account can only be used for the down payment and allowable closing costs associated with the purchase of a home. The bill includes a 10 percent penalty, with some exceptions, including the death of the account holder, for money withdrawn for reasons besides the purchase of a home.
