Governor Shapiro supports first-time home buyer tax deduction bill in Pennsylvania

Pennsylvania's Finance Committee made significant strides towards enhancing homeownership opportunities during their recent meeting on May 14, 2025. Governor Shapiro's commitment to assist first-time homebuyers was a focal point, as he expressed hope for legislative progress that would support more Pennsylvanians in achieving homeownership.

A key development was the passage of a bill proposed by Representative Pizarro, which allows first-time homebuyers to make tax-deductible contributions to a fund, similar to 529 or ABLE accounts. This initiative aims to ease the financial burden on new homeowners and promote savings for future property purchases.

The committee also discussed the Realty Transfer Tax Fund, which currently holds approximately $500 million. This fund has historically fluctuated but remains robust, providing a financial foundation for various state programs. Notably, 15% of this fund is allocated annually to the Keystone Recreation Park and Conservation Fund, amounting to around $100 million. Additionally, the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (FAIR) received an increase in funding from $60 million to $70 million this year, with plans to reach $100 million over the next three years.

During the discussions, concerns were raised about prioritizing funding among these initiatives, especially if the Realty Transfer Tax Fund were to experience a downturn. Committee members emphasized the importance of clear legislative language to ensure that all programs could be adequately supported, even in challenging financial times.

As these initiatives move forward, the Finance Committee's actions signal a proactive approach to addressing housing affordability and accessibility in Pennsylvania, with the potential to significantly impact the lives of many residents seeking homeownership.