ERIE, Pa. (April 12, 2018) – While his heart is in Erie, Sean Calhoun is keeping a watchful eye on Harrisburg and the status of Pennsylvania House Bill 1981.
The proposed legislation would make it easier for Pennsylvanians such as Calhoun to achieve their goal of home ownership.
Recently introduced by Rep. Ryan Bizzarro (D-Erie) and Rep. Rosemary Brown (R-Monroe), H.B. 1981 would create the First-Time Homebuyers Savings Account program.
On Thursday, Calhoun joined Bizzarro, Erie Realtor® Stacey Santos, and representatives from the Pennsylvania Association of Realtors® for a news conference touting the benefits of H.B. 1981. This week, the Urban Affairs Committee unanimously approved the bill, which next will be considered by the House.
The news conference took place at 3115 W. 24th St., Millcreek, a newly renovated single-family home with a $159,900 listing price.
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.
“For generations, home ownership has been a significant part of the American dream,” Bizzarro said. “It has been good for families and for communities, and it is something we have to keep within reach for our fellow Pennsylvanians.”
Calhoun, an Erie native, 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.”
States including New York, Virginia, Alabama, Colorado, Iowa, Minnesota, Mississippi and Montana already offer incentives to younger consumers looking to achieve homeownership.
In a survey, more than 80 percent of Pennsylvanians said the First-Time Homebuyers Savings Account program would be beneficial to the state.
First-time homebuyers or buyers re-entering the housing market would be able to set up 10-year tax-deductible savings accounts for purchasing a home. Parents and grandparents could contribute to the accounts, too.
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. Pointing to the Erie market, 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.