First-time homebuyers savings plan bill passes first two hurdles

[EDIT 2/5/2014: Clarified that the bill would allow savings plans, not savings accounts. I.e., they could be brokerage accounts, mutual funds, or other investments, similar to an IRA.]

First-time homeowner savings plans accounts got two steps closer to reality in the last few days.

First, on January 29 VAR’s First-Time Homebuyers Savings Plan bill (HB331, introduced by Del. Tag Greason) unanimously passed the Agriculture, Commerce, Technology, and Natural Resources subcommittee.

Then on February 3, it passed the House Appropriations Committee — again, unanimously. Now it heads to the floor of the House for a full vote. If it passes there, the Senate will then act on it and hopefully it will be sent to Governor McAuliffe for his signature.

The bill would establish First-Time Homeowner Savings Plans Accounts allowing a contributor to deposit up to $50,000 principal into a banking or investment account, and have all the earnings on that account be free of state taxes. It could then be used for a down payment and closing costs on a first home.

The unanimous support the bill received on both the subcommittee and committee levels bodes well for its future — and for future Virginia homebuyers.

Delegate Tag Greason discusses the First-Time Homebuyers Savings Plan bill in front of the House Agriculture, Commerce, Technology, and Natural Resources subcommittee. Chip Dicks, VAR’s legislative counsel, stands to the right.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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7 Responses to First-time homebuyers savings plan bill passes first two hurdles

  1. doris L says:

    I can’t see this helping 1st time buyers or spur anyone to buy a house in Virginia. A 1st time Buyer can purchase a home with 3.5% down. The VA State tax savings would be very minor. Now, if they
    would allow them to put the $$ in their account as pre-tax dollars, like an IRA, this could be worthwhile.
    Another bill by the Legislature that pays lip service, but very little substance.

  2. MARGARET SHERIDAN says:

    The interest on savings accounts is miniscule, so the advantage of a first time homebuyers SAVINGS account versus the ability to invest up to $50,000 in investments of the first time homebuyers choice seems less preferable.

  3. MARGARET SHERIDAN says:

    Comment: when comments are awaiting moderation I believe they are in reality awaiting censorship. Is this free speech??

  4. Hope Egan says:

    This legislation is a waste of VA taxpayer money. Here is why.

    On a $50,000 savings account earning 1%, we’re only talking about $500 of income, which amounts to about $25 in VA state income taxes. Will this really help anyone buy a new home?

    In addition, investors who put their money in US Savings Bonds (although not as secure as it used to be) already avoid state income taxes.

    Finally, folks who NEED help the most in buying their homes generally don’t have $50,000 to put towards it, and are not in high tax brackets.

    Let’s think critically about proposed legislation before we get too excited about it!

  5. I’m not sure what you mean, Margaret. Comments need to be approved to avoid spam — we don’t want our discussions filling with ads. (We also reserve the right not to publish personal attacks or off-topic comments.) I’m usually able to approve comments within a few minutes, although it may be longer at night or on weekends.

    Was a comment of yours not approved? I’d be happy to look into it for you.

  6. Eileen T says:

    I think this is the most ridiculous first time home buyer program I have ever seen in the 30 years of lending and real estate. This doesn’t help a first time home buyer do anything. Who thought of this worthless time waster?

  7. Just a quick point: These would not be limited to traditional savings accounts (e.g., at low interest rates). Similar to IRAs or college savings plans, they could be brokerage accounts, mutual funds, etc. The gains on those types of accounts (and the taxes on those gains) could be significantly higher than on savings accounts.

    I’m going to add a note to the original post to clarify this.

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