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HB 6876

AN ACT ESTABLISHING FIRST-TIME HOMEBUYER SAVINGS ACCOUNTS AND A RELATED TAX DEDUCTION AND CREDIT.

2025 Regular Session Introduced by Jill Barry and 6 co-sponsors

Creates First-Time Homebuyer Savings Accounts with state tax deduction and credit to boost down payments, with earnings/withdrawals for home costs tax-free.

TABLED FOR HOUSE CALENDAR
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Bill Summary · HB 6876

Summary — HB 6876: First-Time Homebuyer Savings Accounts; Related Tax Deduction & Credit

Status: Tabled for House Calendar
Introduced: February 6, 2025

Purpose

HB 6876 would create a state-supported, tax‑preferred savings vehicle to help first‑time homebuyers accumulate funds for a down payment and other qualified home‑purchase costs. The bill pairs the new savings accounts with state income tax incentives (a deduction for contributions and a related tax credit) to encourage saving and increase access to homeownership.

Key provisions (high level)

  • Establishes “First‑Time Homebuyer Savings Accounts” (FTHSA) to be offered by financial institutions or other authorized custodians.
  • Allows individuals (and possibly custodial accounts for minors) to make contributions to an FTHSA; the bill specifies annual contribution limits and maximum aggregate account balances.
  • Provides a state income tax deduction for eligible contributions to an FTHSA (amounts and phaseouts set in the bill).
  • Creates a related state tax credit (structure and eligibility criteria set by the bill) intended to further assist lower‑ and moderate‑income savers.
  • Excludes qualified withdrawals and account earnings used for eligible home purchase costs from state taxable income.
  • Defines “first‑time homebuyer” and lists qualified uses (e.g., down payment, closing costs, other purchase-related expenses). Typically a first‑time homebuyer is someone who has not owned a principal residence within a specified prior period.
  • Includes rules for non‑qualified distributions (taxation, recapture of deduction/credit, and possible penalties) and for rollovers/closures.
  • Assigns administrative and reporting duties to the Department of Revenue Services (DRS) and requires participating financial institutions to report contributions, distributions, and account balances.
  • Contains compliance, recordkeeping, and anti‑abuse provisions.

Who is affected

  • Prospective first‑time homebuyers in the state (primary beneficiaries).
  • Individual taxpayers (who may claim deductions/credits).
  • Financial institutions and custodians (must offer and report on accounts).
  • Department of Revenue Services (administration, guidance, audits).
  • State budget — reduced income tax receipts to the extent of deductions/credits and exclusion of earnings; potential offset if increased home purchases produce other revenue changes.

Legislative status & timeline

  • Referred to the Joint Committee on Banking (2/6/2025); public hearing held (2/13/2025).
  • Reported with Joint Favorable Substitute (3/6/2025).
  • Referred to Office of Legislative Research and Office of Fiscal Analysis (3/17/2025).
  • Favorably reported and placed on the House calendar (filed as House Calendar No. 142 / File No. 189; 3/24/2025).
  • Joint Favorable again (5/5/2025); filed with LCO and reported out (5/6/2025).
  • Currently: TABLED FOR HOUSE CALENDAR (5/6/2025).

Potential impacts to watch

  • Short‑term fiscal impact: lower state income tax revenue from deductions/credits and exempted earnings; OFA analysis pending.
  • Distributional effects: larger benefits for savers able to contribute; the credit aims to target lower‑income first‑time buyers.
  • Housing market: may modestly increase near‑term demand for entry‑level homes by improving down‑payment readiness.

Note: This summary reflects the title and legislative actions for HB 6876. For precise legal text, contribution limits, credit amounts, definitions, and effective dates, consult the bill language as filed with the Legislative Commissioners’ Office (LCO) or the Office of Fiscal Analysis.

Compiled from official sources — confirm details with the bill’s official record.

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