H271: First-Time Homebuyer Savings Accounts:

Investing in the next generation

  • Similar to existing Idaho Code establishing tax-advantaged savings accounts for healthcare and educational purposes, H271 would create First-Time Homebuyer Savings Accounts.
  • The intent of this legislation is to offer prospective first-time home buyers in Idaho an opportunity to prioritize saving for what is often the most significant investment of their lives.
    • According to IHFA, there will be over 13,000 first-time home buyers in 2019.
    • Average age is 34
    • Average loan amount is $180,515
    • 83% of these buyers brought less than 3% to closing
      • First-time buyers represent about 1/3 of all buyers – and growing.
  • Idaho’s First-Time Homebuyer Savings Accounts allows an account holder(s) to deduct up to $3,000 per year for an individual and up to $6,000 per year for married couples for the eventual down payment on a home, or other eligible home cost. Including:
    • Down payment
    • Closing costs
    • Appraisal costs
    • Credit history report
    • Points
    • Pro-rated property taxes
    • Home inspections
    • Loan origination fees
  • Several states have already decided to offer this incentive to save to first-time home buyers including: Montana, Colorado, Oregon and Iowa.
  • Reporting requirements mirror existing Idaho Code (Idaho Medical Savings Accounts) for tax-advantaged savings accounts and can be established at any depository in the state of Idaho.
  • Furthermore, the reporting section of the bill was drafted with the input and support from the Idaho Bankers Association and the Northwest Credit Union Association.
  • The Idaho State Tax Commission was also consulted and provisions for auditing purposes were added on page 3 lines 8-10 and line 13.
  • A critical part of economic health and growth is attracting and retaining young workers into the labor market.  One of the struggles in many parts of Idaho is getting new college graduates and people in early parts of their careers to either remain in the state or relocate here.
  • Part of that struggle is the availability of affordable housing, especially for first time homebuyers.
  • First-Time Home Buyer Savings Accounts will offer Idahoans deciding to prioritize saving for their future, the opportunity for a tax-break while making homeownership more attainable.
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