First-Time Homebuyer Savings Act

First Time Homebuyer Savings Act

On April 30th 2019, Senators Theresa Gavarone & Bob Peterson introduced Senate Bill 139 in the Ohio Senate to create a tax deductive savings account for Ohioans. This Ohio income Tax Deduction is designed to help empower Ohioans to prepare for homeownership in a meaningful way, with a tax-free savings account. With 8 in 10 non-homeowners reporting that affordability is a barrier to home ownership, this Bill may help ensure the American Dream of homeownership by creating a way for families to save for their loved ones. Details in the Bill include the following:

Contributions:

  • Annual maximum contribution is $5K for single person and $10K for married people
  • Max 15-year cumulative contribution amount is $50K for single and $100K for married people
  • Contributions plus interest are tax deductible

Management

  • Account is self-managed; banks have no liability or responsibility of management

Penalties

  • Withdraw penalty is 10%

Exceptions

  • Account holder death or disability
  • Bankruptcy
  • Monies transferred from 1FHBSA to another FHBSA
  • Financial Institution fees

Ohio REALTORS® reports that transitioning from a renter to homeowner brings a marginal increase in consumer spending for goods and services with an estimated $97 million in economic activity in Ohio and $25K per transaction in construction-related economic activity in the state from newly constructed housing units. As REALTORS®, we believe home-ownership strengthens our communities, helps build generational wealth and also stimulates our local and state economies.

Senate Bill 139 has been referred to the Ways and Means Committee with the first hearing to have taken place on May 21, 2019. Stay tuned for updates from The Ohio Legislature!