Creating Homeownership Opportunity Act offers pre-tax savings program for first home
WILMINGTON, DC – August 5, 2013 – (RealEstateRama) — U.S. Representatives Joe Heck (R-NV), John Carney (D-DE), Daniel Webster (R-FL), and Peter Welch (D-VT), today announced the introduction of H.R. 2929, the “Creating Homeownership Opportunities Act,” bipartisan legislation that would create a pre-tax savings program — similar to a Health Savings Account — for the purpose of saving toward a down payment on a first home.
“Homeownership is a critical facet of American culture that should be encouraged because it increases the standard of living and improves local economies,” Rep. Heck said. “Purchasing a home is a major financial commitment, but many young and low income families are struggling to save for a down payment on their first home. We should allow individuals and families to responsibly prepare for that commitment by providing them access to a savings plan that encourages larger down payments and less debt. The Creating Homeownership Opportunity Act is exactly the kind of step Congress should be taking to restore the health of the housing market in Nevada and the nation. I look forward to working in a bipartisan way with Congressman Carney and the rest of the bill’s sponsors to get this important bill passed.”
“Purchasing a home is the foundation of the American Dream, but many families are having trouble saving enough money for a down payment,” said Congressman Carney. “This legislation allows families to set aside a tax-free portion of their earnings to use toward their first home purchase. As the economy continues to struggle, we need to jumpstart the housing market and encourage American families to save money and take on less debt.”
“As difficult economic times persist, families are continuing to struggle to save enough money to make the necessary down payment on a home,” said Congressman Webster. “The bipartisan Creating Homeownership Opportunity Act facilitates and rewards responsible saving by allowing dollars set aside for a first home to accumulate tax free. This tax relief will make responsible homeownership for Central Floridians more attainable now, and lessen their debt burden in the future.”
“The recession and sluggish recovery has pushed the dream of homeownership out of reach for too many Americans,” said Rep. Peter Welch. “Our bill will provide a real boost to families at a time when they need it most by providing an incentive to save for a down payment on their first home. I’m proud to work with this bipartisan group of lawmakers to introduce a common sense solution that provides real relief to hard working Americans.”
First-time home buyers would be eligible to make annual contributions up to $10,000, indexed for inflation. Qualifying purchases would include the down payment on a primary residence, as well as closing costs and fees associated with the purchase of that home. Non-qualified disbursements would be subject to income tax, as well as a 20 percent penalty — a structure mirroring that of a Health Savings Account. An account balance may be rolled over into an IRA to supplement retirement savings if an account holder reaches 55 without purchasing a home, maintains the account for 20 years without purchasing a home, or purchases a home and has a remaining balance in the account.