HB 818 — An Act providing for the establishment of first-time homebuyer savings accounts for first-time homebuyers in this Commonwealth; establishing the First-time Homebuyer Savings Account Program and the First-time Homebuyer Savings Account Fund; and imposing duties on the Treasury Department.

PRINTER'S NO.   848

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 818
                                               Session of
                                                 2025

     INTRODUCED BY BIZZARRO, GIRAL, PIELLI, CONKLIN, KHAN, SANCHEZ,
        T. DAVIS, HILL-EVANS, POWELL, SCHLOSSBERG, DONAHUE, HADDOCK,
        NEILSON, MERSKI, CIRESI, FREEMAN, OTTEN, HOHENSTEIN, DEASY,
        O'MARA, STEELE AND GREEN, MARCH 5, 2025

     REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
        MARCH 5, 2025


                                    AN ACT
 1   Providing for the establishment of first-time homebuyer savings
 2      accounts for first-time homebuyers in this Commonwealth;
 3      establishing the First-time Homebuyer Savings Account Program
 4      and the First-time Homebuyer Savings Account Fund; and
 5      imposing duties on the Treasury Department.
 6      The General Assembly of the Commonwealth of Pennsylvania
 7   hereby enacts as follows:
 8   Section 1.   Short title.
 9      This act shall be known and may be cited as the First-Time
10   Homebuyer Savings Account Act.
11   Section 2.   Definitions.
12      The following words and phrases when used in this act shall
13   have the meanings given to them in this section unless the
14   context clearly indicates otherwise:
15      "Account."    A first-time homebuyer savings account
16   established under section 5.
17      "Account holder."    An individual who establishes,
18   individually or jointly, an account.
 1      "Allowable closing costs."     A disbursement listed on a
 2   settlement statement for the purchase of a single-family
 3   residence in this Commonwealth by a qualified beneficiary.
 4      "Bureau."    The First-time Homebuyer Savings Account Bureau
 5   established under section 3.
 6      "Department."   The Treasury Department of the Commonwealth.
 7      "Eligible costs."   A down payment and allowable closing costs
 8   for the purchase of a single-family residence in this
 9   Commonwealth by a qualified beneficiary. The term does not
10   include costs incurred prior to the establishment of an account.
11      "Financial institution."    A bank, trust company, savings
12   institution, credit union, broker-dealer, insurance company or
13   mutual fund or similar entity authorized to do business in this
14   Commonwealth.
15      "First-time homebuyer."     An individual who resides in this
16   Commonwealth and has not owned or purchased directly or through
17   a trust, limited liability company, partnership or other legal
18   entity, either individually or jointly, a single-family
19   residence during the three-year period prior to the purchase
20   date of a single-family residence.
21      "Fund."    The First-time Homebuyer Savings Account Fund
22   established under section 4(c).
23      "Program."   The First-time Homebuyer Savings Account Program
24   established under section 4.
25      "Qualified beneficiary."    A first-time homebuyer who is
26   designated as a qualified beneficiary by the account holder of
27   an account.
28      "Settlement statement."     A statement of receipts and
29   disbursements from a real estate transaction, including a
30   statement prescribed under 12 U.S.C. Ch. 27 (relating to real

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 1   estate settlement procedures).
 2      "Single-family residence."       A single-family residence owned
 3   and occupied by a qualified beneficiary as the qualified
 4   beneficiary's principal residence, which may include a
 5   manufactured home, trailer, mobile home or unit in a
 6   condominium, cooperative or planned community.
 7      "Tax Reform Code of 1971."       The act of March 4, 1971 (P.L.6,
 8   No.2), known as the Tax Reform Code of 1971.
 9   Section 3.     First-time Homebuyer Savings Account Bureau.
10      The First-time Homebuyer Savings Account Bureau is
11   established within the department for the purpose of
12   administering the program.
13   Section 4.     First-time Homebuyer Savings Account Program.
14      (a)   Establishment.--The First-time Homebuyer Savings Account
15   Program is established in the bureau.
16      (b)   Application.--The application for the program shall be
17   on a form and in a manner prescribed by the department which
18   shall be available on the department's publicly accessible
19   Internet website.
20      (c)   Fund.--
21            (1)   The First-time Homebuyer Savings Account Fund is
22      established in the State Treasury.
23            (2)   The fund shall consist of:
24                  (i)    All contributions made by account holders and
25            all interest, earnings and additions thereto.
26                  (ii)    Any other money, public or private,
27            appropriated or made available to the department for the
28            fund from any source and all interest, earnings and
29            additions thereto.
30            (3)   The department shall annually submit to the General

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 1      Assembly a budget request outlining the operating and
 2      administrative expenses of the program. Upon appropriation by
 3      the General Assembly, expenses incurred by the department and
 4      the bureau shall be paid from the fees, charges and
 5      investment earnings of money in the fund.
 6            (4)   Assets of the fund shall be preserved, invested and
 7      expended solely for the purposes specified in this act.
 8            (5)   The department shall repay from the fees, charges
 9      and investment earnings of the fund to the General Fund any
10      money appropriated for the initial planning, organization and
11      administration of the program. The repayment must occur
12      within a 10-year period commencing on September 1, 2030. The
13      department may not pledge the credit or taxing powers of the
14      Commonwealth. Any obligation or debt under this section shall
15      not be deemed an obligation or debt of the Commonwealth, nor
16      shall the Commonwealth be liable to pay principal and
17      interest on obligations or to offset any loss of principal
18      and interest earnings on investments made by the department.
19            (6)   The policies governing the investment of the fund
20      shall be directed to obtaining sufficient income to meet the
21      fund's obligations under this act, maintaining necessary
22      reserves and covering operating expenses. The policies
23      governing the fund shall be directed to providing for an
24      appropriate balance of risk, liquidity and return
25      commensurate with the management of a prudent investor. The
26      department, its investment managers, program managers and
27      trustees shall have the authority to invest and reinvest
28      money in the fund in all lawful investments.
29   Section 5.     First-time homebuyers savings account.
30      (a)   Approval.--Upon approval from the bureau into the

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 1   program, an individual may establish a first-time homebuyer
 2   savings account.
 3      (b)   Designation of qualified beneficiary.--An account holder
 4   shall designate no more than one first-time homebuyer as the
 5   qualified beneficiary of an account. The account holder may
 6   designate the account holder as the qualified beneficiary and
 7   may change the designated qualified beneficiary at any time. The
 8   account holder shall declare the qualified beneficiary on the
 9   annual personal income tax return required under the Tax Reform
10   Code of 1971 for the tax year in which the account is
11   established and for any year in which the qualified beneficiary
12   is changed.
13      (c)   Use of account.--Money from an account may only be used
14   to pay or reimburse a qualified beneficiary's eligible costs for
15   the purchase of a single-family residence in this Commonwealth.
16      (d)   Joint account holders.--An account holder may jointly
17   own an account with another individual if the joint account
18   holders file a joint personal income tax return under Article
19   III of the Tax Reform Code of 1971.
20      (e)   Qualified beneficiary of more than one account.--An
21   individual may be designated as the qualified beneficiary on
22   more than one account.
23      (f)   Contributions to account.--
24            (1)   Subject to the limitations under section 6(d), an
25      individual other than the account holder may contribute to an
26      account.
27            (2)   The maximum amount of all contributions to an
28      account shall be $150,000.
29   Section 6.     Deduction and exclusion from taxable income.
30      (a)   Deduction of contributions.--Except as otherwise

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 1   provided under subsection (c), the amount contributed by an
 2   account holder to an account during each tax year:
 3            (1)   May not exceed $5,000 for an account holder who
 4      files an individual personal income tax return or $10,000 for
 5      joint account holders who file a joint personal income tax
 6      return.
 7            (2)   Shall be deductible, up to the contribution limits
 8      under paragraph (1), from the taxable income of the account
 9      holder under Article III of the Tax Reform Code of 1971
10      during the tax year the contribution was made.
11      (b)   Exclusion of earnings.--Except as otherwise provided
12   under subsection (c), the amount of earnings on an account
13   during the tax year may be excluded from the taxable income of
14   an account holder under Article III of the Tax Reform Code of
15   1971.
16      (c)   Limitations on deductions and exclusions.--An account
17   holder may claim a deduction and exclusion under this section:
18            (1)   For a period of no more than 10 years.
19            (2)   For an aggregate amount of principal and earnings
20      not to exceed $50,000 within 10 years.
21            (3)   If the principal and earnings of an account remain
22      in the account until a withdrawal is made for the eligible
23      costs relating to the purchase of a single-family residence
24      by a qualified beneficiary.
25      (d)   Nonaccount holders.--An individual other than the
26   account holder who deposits money into an account under section
27   5(f) is not entitled to the deduction and exclusion provided for
28   under this section.
29      (e)   Remaining money.--Money in an account not expended on
30   eligible costs before expiration of the 10-year period under

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 1   subsection (c)(1) shall be included in the account holder's
 2   taxable income under Article III of the Tax Reform Code of 1971.
 3      (f)   Application to alternative basis taxation.--The
 4   deduction and exclusion from taxable income shall apply to any
 5   alternative basis for calculating taxable income under Article
 6   III of the Tax Reform Code of 1971.
 7   Section 7.     Distribution of money.
 8      Upon proof of the death of an account holder, a financial
 9   institution shall distribute the account in accordance with the
10   contract terms governing the account.
11   Section 8.     Withdrawal for purpose other than eligible costs.
12      If an account holder or qualified beneficiary withdraws any
13   amount from an account and uses the withdrawal for a purpose
14   other than eligible costs:
15            (1)   The entire amount withdrawn shall be included in the
16      account holder's taxable income as interest income under
17      Article III of the Tax Reform Code of 1971 for the tax year
18      the withdrawal was made.
19            (2)   The account holder or qualified beneficiary shall
20      pay to the department a penalty equal to 10% of the amount
21      withdrawn. The penalty may not apply to money withdrawn from
22      an account that was:
23                  (i)    withdrawn by reason of the account holder's or
24            the qualified beneficiary's death or disability; or
25                  (ii)   a disbursement of assets of the account
26            pursuant to a filing for protection under 11 U.S.C.
27            (relating to bankruptcy).
28   Section 9.     Effective date.
29      This act shall take effect in 60 days.



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