HARRISBURG – Pennsylvanians would be allowed to open an account of up to $150,000 for the sole purpose of purchasing a first home with a financial institution of their choice under legislation approved by the state Senate. Funds from a first-time home buyer savings account may only be used to pay or reimburse the eligible costs for the purchase of a single-family home in PA, according the bill sponsor, Montgomery County Sen. Bob Mensch. Individuals taking advantage of a first-time homebuyers savings account will be able to deduct up to $5,000 on their individual state taxes, or up to $10,000 for a joint account. The state tax deduction can be for no longer than 10 years, and may not exceed $50,000 within a ten-year period. Unused funds would be counted against an individual’s taxable income. The bill now goes to the state House.

SEN. BOB MENSCH