(The Center Square) – First-time home buyers in Pennsylvania may soon get help from the state government.
Two bills cleared a joint House committee on Tuesday meant to make it easier for buyers just entering the market as record-high housing prices push the dream out of reach for many.
House Bill 1387 eliminates the 1% realty transfer tax levied on purchases for first-time purchasers, reducing the often-prohibitive closing costs. Legislators hope the measure could inject some life into the stagnant population growth by addressing a small aspect of the ongoing affordability crisis.
Home buyers would still be subject to local realty transfer taxes.
“I believe that this exclusion will provide vital assistance to hardworking Pennsylvanians and their families, the very people that will help drive future economic growth and competitiveness for our great Commonwealth,” said the bill’s sponsor, Thomas Kutz, R-Mechanicsburg.
The crisis is nationwide, fueled by increased prices, high interest rates and insufficient wages. The large number of millennials ready to put down roots and begin families are met with few options for affordable housing, while investors and developers buy up much of what is available. According to Core Logic, investor shares accountfor nearly a third of the homes sold in 2023.
According to the United Way, in Pennsylvania 1.4 million people are living above the poverty line while still unable to cover housing costs while meeting other basic needs like food and transportation.
The circumstances have led to a high rate of homelessness with the state reporting over 15,000 unhoused people on a given day. For many, home ownership appears, for now, to be a pipe dream.
Another bill aims to turn that dream into a reality people can see themselves attaining, creating a First Time Home Buyers Savings Account. Money deposited into these accounts will be deductible from state income tax.
“Homeownership strengthens communities and provides stability for families. A first-time homebuyers’ savings account can be a tool in helping people overcome financial obstacles to home ownership,” wrote Rep. Ryan Bizarro, D-Erie, the bill’s sponsor.
Other states are seeing success with similar programs. Savings accounts are currently available in Alabama, Colorado, Idaho, Minnesota, Mississippi, Montana, Oregon and Virginia.
The bill’s sponsors hope that it could increase home sales by up to 4,000 annually and have an economic impact of upward of $7.8 million.
In a show of bipartisan solidarity, representatives were unanimous in their support of both bills, giving promise to its momentum in the House.
