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SB 445

AN ACT RELATING TO TAXATION -- FIRST-TIME HOMEBUYER SAVINGS ACCOUNT ACT

2025 Regular Session Introduced by Bob Britto and 8 co-sponsors

Rhode Island creates tax-advantaged savings accounts allowing first-time homebuyers to accumulate down payment funds with pre-tax contributions and tax-free growth.

03/04/2025 Committee recommended measure be held for further study
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Bill Summary · SB 445

Legislative bill overview

SB 445 establishes a First-Time Homebuyer Savings Account program in Rhode Island, allowing eligible individuals to set aside pre-tax income in dedicated accounts for down payments and closing costs. The bill creates tax-advantaged savings vehicles similar to existing programs like 529 education savings plans, enabling first-time homebuyers to accumulate capital more efficiently.

Why is this important

Rising housing costs and down payment requirements have made homeownership increasingly inaccessible for working and middle-class Rhode Islanders. By allowing tax-deductible contributions and tax-free growth, this program could lower the savings barrier to homeownership and boost first-time buyer participation, though actual uptake depends on account limits and eligibility thresholds not detailed in available summaries.

Potential points of contention

  • Tax revenue impact: The state foregoes income tax revenue on contributions and earnings, shifting the cost burden to general taxpayers who don't use the program
  • Regressive benefit structure: Tax-advantaged accounts inherently benefit higher-income earners with larger tax liabilities; lower-income workers may see minimal tax savings
  • Definitional scope: "First-time homebuyer" qualifications and account contribution limits will determine who benefits and whether the program effectively targets those most in need of assistance

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

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