Bill > S2367

This bill establishes the "First-Time Homebuyer Savings Account Act" in Rhode Island, allowing individuals who have not owned a home in the past three years to open a special savings account with Rhode Island housing. These accounts, designated as "first-time homebuyer savings accounts," can be funded with cash and marketable securities, and contributions can be made by others besides the account holder. The primary purpose of these accounts is to save for a down payment and "allowable closing costs" (expenses listed on a settlement statement for a real estate transaction) for purchasing a home in Rhode Island. Account holders can deduct their contributions from their Rhode Island income taxes, with annual limits of $15,000 for individuals and $30,000 for joint filers, and the earnings within the account are also excluded from taxable income. These tax benefits are available for up to ten years, with a total principal limit of $150,000. Funds must remain in the account until withdrawn for eligible home purchase costs, and withdrawals for other purposes will incur a 10% penalty and be subject to taxation, with exceptions for death, disability, or bankruptcy. The act also outlines responsibilities for account holders, including reporting account activity to the division of taxation and provides for the designation of a "qualified beneficiary," who is the first-time homebuyer intended to use the funds.

Budget and Finance

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