Bill > H3041

This bill establishes a first-time homebuyer savings account program in Massachusetts that allows individuals to create specialized savings accounts with tax benefits to help purchase a single-family residence. The bill defines key terms such as a "first-time homebuyer" as someone who has not owned a home in the past three years and resides in Massachusetts. Account holders can open accounts with financial institutions and designate a qualified beneficiary (which can be themselves or another first-time homebuyer) and contribute cash or marketable securities without limits. Participants can receive significant tax advantages, including an annual tax deduction of up to $10,000 for individual filers or $20,000 for joint filers, and can exclude earnings from taxable income. The accounts have a 15-year maximum duration and a total principal and earnings limit of $100,000. If funds are not used for eligible home purchasing costs like down payments or closing expenses within the 15-year period, the money becomes taxable. Withdrawals for non-eligible purposes will be taxed and potentially penalized, with exceptions for situations like death, disability, or bankruptcy. Financial institutions are largely shielded from administrative responsibilities and liability related to these accounts. The program is designed to incentivize and support first-time homeownership by providing tax-advantaged savings mechanisms.

Budget and Finance

https://malegislature.gov/Bills/194/H3041