Posted on May 4, 2021
State Rep. Tom Delnicki (R-14) praised the passage of a proposal that he co-sponsored, HB-5027, An Act Requiring the Banking Commissioner to Establish A First-Time Homebuyer Savings Account Program and Establishing A Tax Deduction for Contributions To First-Time Homebuyer Savings Accounts. The legislation, which encourages Connecticut residents to save for and purchase first homes in the state successfully passed out of the Finance, Revenue and Bonding Committee.
The legislation establishes a first-time homebuyer savings account program by allowing individuals to open savings accounts at state banks and credit unions that are dedicated to paying for or reimbursing the down payment and closing costs of an account holder. The proposal details that individuals must be first-time homebuyers and must reside in the home purchased with account funds.
The bill would allow anyone to contribute to a first-time homebuyer savings account and there is no limit to the amount of contributions that may be made to, or contained in, an account.
“This savings program encourages future homebuyers to save for a down payment with the incentive of the state providing a tax benefit,” said Rep. Delnicki. “In addition, this bill is a motivator for young people to save for their first home purchase, encouraging them to grow and plant roots in Connecticut.”
The limits of account funds use are: to paying for (1) a qualified beneficiary’s down payment and closing costs to purchase a single-family residence in the state as his or her primary residence and (2) the bank’s or credit union’s account service fees. Allowable closing costs are the disbursements listed on the statement of receipts and disbursements associated with the home purchase.
Both the Connecticut Realtors and the Connecticut Council of Small Towns testified in favor of the legislation.
The bill now heads to the floor of the House of Representatives for further debate and a vote.