Pennsylvania HB 225: An Act providing for the establishment of first-time home buyer savings accounts for first-time home buyers in this Commonwealth.

Bill Text

PRINTER'S NO. 178
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 225
Session of
2025
INTRODUCED BY KUTZ, ROWE, FLEMING, RADER, KUZMA AND REICHARD,
JANUARY 22, 2025
REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
JANUARY 22, 2025
AN ACT
Providing for the establishment of first-time home buyer savings
accounts for first-time home buyers in this Commonwealth.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the First-Time
Home Buyer Savings Account Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account holder." An individual who establishes,
individually or jointly, a first-time home buyer savings
account.
"Allowable closing costs." A disbursement listed on a
settlement statement for the purchase of a single-family
residence in this Commonwealth by a qualified beneficiary.
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"Department." The Department of Revenue of the Commonwealth.
"Eligible costs." The down payment and allowable closing
costs for the purchase of a single-family residence in this
Commonwealth by a qualified beneficiary. Eligible costs shall
not include costs incurred prior to the establishment of a
first-time home buyer savings account.
"Financial institution." A bank, trust company, savings
institution, credit union, broker-dealer, insurance company and
mutual fund or similar entity authorized to do business in this
Commonwealth.
"First-time home buyer." An individual who resides in this
Commonwealth and has not owned or purchased directly or through
a trust, limited liability company, partnership or other legal
entity, either individually or jointly, a single-family
residence during the three-year period prior to the purchase
date of a single-family residence.
"First-time home buyer savings account." An account
established under section 3.
"Qualified beneficiary." A first-time home buyer who is
designated as a qualified beneficiary by the account holder of
the first-time home buyer savings account.
"Settlement statement." A statement of receipts and
disbursements from a real estate transaction, including a
statement prescribed under the Real Estate Settlement Procedures
Act of 1974 (Public Law 93-533, 88 Stat. 1724).
"Single-family residence." A single-family residence owned
and occupied by a qualified beneficiary as the qualified
beneficiary's principal residence, which may include a
manufactured home, trailer, mobile home or a unit in a
condominium, cooperative or planned community.
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"Tax Reform Code of 1971." The act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
Section 3. Establishment of first-time home buyer savings
account.
(a) Designation of first-time home buyer savings account.--
Beginning six months after the effective date of this
subsection, an individual may open a first-time home buyer
savings account with a financial institution.
(b) Designation of qualified beneficiary.--An account holder
shall designate no more than one first-time home buyer as the
qualified beneficiary of a first-time home buyer savings
account. The account holder may designate themself as the
qualified beneficiary and may change the designated qualified
beneficiary at any time. The account holder shall declare the
qualified beneficiary on the annual personal income tax return
required under the Tax Reform Code of 1971 for the tax year in
which the first-time home buyer savings account is established
and for any year in which the qualified beneficiary is changed.
(c) Use of first-time home buyer savings account.--Money
from a first-time home buyer savings account may only be used to
pay or reimburse a qualified beneficiary's eligible costs for
the purchase of a single-family residence in this Commonwealth.
(d) Expenses.--The account holder may not use money held in
a first-time home buyer savings account to pay expenses of
administering the first-time home buyer savings account, except
that a service fee may be deducted from the first-time home
buyer savings account by a financial institution in which the
first-time home buyer savings account is held.
(e) Joint account holders.--An account holder may jointly
own a first-time home buyer savings account with another person
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if the joint account holders file a joint personal income tax
return under Article III of the Tax Reform Code of 1971.
(f) Qualified beneficiary of more than one first-time home
buyer savings account.--An individual may be designated as the
qualified beneficiary on more than one first-time home buyer
savings account.
(g) Contributions to first-time home buyer sav