Bill > SB725

This bill establishes the "First Time Home Buyers Savings Account Act" to help West Virginia residents save for a down payment and closing costs on their first home, recognizing the current economic challenges in achieving homeownership. It defines key terms such as "account holder" (a first-time home buyer who hasn't owned a home in three years and intends to buy in West Virginia), "eligible costs" (down payment and allowable closing costs), and "financial institution" (various entities like banks, credit unions, and investment firms authorized to do business in the state). The act allows individuals to create these savings accounts, which can hold cash and marketable securities, and permits joint accounts for married couples who are both first-time buyers and file jointly. Contributions to these accounts are deductible from West Virginia taxable income, with limits of $5,000 for individuals and $10,000 for joint filers, and these deductions are subject to income-based limitations, with higher incomes receiving reduced or no deduction. Earnings within the account are tax-exempt until withdrawn, and withdrawals for eligible costs are also tax-exempt, provided the account is used for its intended purpose within a 10-year period or up to a $50,000 aggregate limit. Withdrawals for non-eligible purposes will be taxed and may incur a 10% penalty, except in cases of death, disability, bankruptcy, or transfer to another eligible account. Financial institutions will provide annual statements to account holders, but they are not responsible for tracking the use of withdrawn funds or ensuring the account meets all requirements. This program will be in effect for tax years beginning on or after January 1, 2026, and before January 1, 2032, with provisions for accounts established before January 1, 2030, to continue their exemption.

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http://www.wvlegislature.gov/Bill_Status/Bills_history.cfm?input=725&year=2026&sessiontype=RS&btype=bill