Bill > HB195

This bill creates a tax incentive program for first-time home buyers in Kentucky by establishing a new type of savings account with specific tax benefits. The bill allows first-time home buyers (defined as individuals who haven't owned a principal residence in the last 10 years) to receive tax deductions for contributions to an eligible savings account and to exclude any interest earned from such accounts. For taxable years between 2026 and 2036, individuals can deduct up to $5,000 (for single filers) or $10,000 (for married couples filing jointly) annually, with a lifetime maximum deduction of $25,000 for single filers or $50,000 for joint filers. The savings account can only be used for down payments or closing costs on a qualified principal residence within Kentucky. The bill includes provisions allowing withdrawals in certain circumstances like death, disability, job loss, or bankruptcy, and requires the Department of Revenue to report detailed information about the program's usage to the Legislative Research Commission. If funds are withdrawn for purposes other than eligible home-buying costs, the tax benefits will be recaptured. The legislation aims to help first-time home buyers save money for purchasing a home by providing tax incentives that make saving more attractive and beneficial.

Budget and Finance

https://apps.legislature.ky.gov/record/25RS/hb195.html