State Senators Theresa Gavarone (R-Bowling Green) and Bob Peterson (R-Washington Court House) last week introduced Senate Bill 24, also referred to as the “First-Time Home Buyer Savings Act.”
The legislation will create a new type of savings account that future buyers can use for the purchase of their first home.
The law will first require a savings account be opened at any financial institution in the state. Once opened, the account holder(s) can begin contributing. Up to $5,000 for single tax filers and $10,000 for joint filers, plus accrued interest, will be tax deductible each year.
“Even before this pandemic, many Ohioans who dreamed of owning a home were struggling to come up with the money for a down payment,” Gavarone said. “COVID-19 has only multiplied that problem, and it is clear that this legislation is needed to make home ownership more attainable for Ohioans.”
Modeled after legislation currently in law in at least eight states, the money deposited into the account can only be used for the down payment and allowable closing costs associated with the purchase of a home. The bill includes a 10% penalty, with some exceptions, including the death of the account holder, for money withdrawn for reasons besides the purchase of a home.