Bill would use 10% of state realty transfer tax to fund $2,500 first‑time homebuyer rebates; committee raises targeting and funding questions

Representative Nate Davidson introduced House Bill 1450 to the House Finance Committee, proposing a rebate program for homebuyers funded by diverting 10% of the state portion of the realty transfer tax (RTT).

Davidson said the bill is intended to help homebuyers cope with post‑COVID price increases and to spur population growth in Pennsylvania ahead of the 2030 census. He described the proposal as a rebate (rather than a tax credit) to deliver funds quickly: “I peeled off 10% of the RTT to fund this program,” he said, and described the eligibility rule as “first time in Pennsylvania ever” for people moving into the state and “first time in the past five years” for residents who already live in Pennsylvania. The draft sets the rebate at up to $2,500 per eligible household and the program to sunset in 2030, with a required report to the General Assembly evaluating the program’s efficacy.

Mark Kibbe, chair of the Pennsylvania Association of Realtors legislative committee, testified in support and described market pressures affecting first‑time buyers: he said listings have fallen and median prices have risen since 2018, noting that Pennsylvania’s median sales price in March 2025 was about $285,000 compared with $140,000 in March 2018. Kibbe said first‑time buyers now represent a smaller share of sales and “first time homebuyers need our help.” He and Davidson both said the sponsor chose a fixed rebate to provide an immediate cash benefit rather than a delayed tax credit.

Several committee members questioned targeting, fiscal impact and program mechanics. Chair Griner said she preferred directing benefits only to true first‑time buyers rather than a broader “first time in a while” definition, and she raised concerns about program nuances such as divorce or subsequent sales. Davidson responded that the five‑year rule was intended to loosen market constraints by helping owners who want to downsize as well as new residents.

Members and staff reviewed recent RTT revenues and existing RTT allocations. Committee staff noted RTT state receipts have averaged around $500 million historically, with swings (as low as about $279 million during the Great Recession and as high as about $850 million in recent years). The committee also discussed existing RTT designations: approximately 15% is statutorily dedicated to the Keystone Recreation, Park and Conservation Fund; the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (FAIR) receives a flat appropriation (recently increased from about $60 million to $70 million with plans to ramp toward $100 million); those allocations were discussed in evaluating whether a 10% diversion is feasible.

Davidson and Kibbe estimated that if the RTT base were roughly $500 million, 10% would be about $50 million and could fund roughly 20,000 rebates of $2,500. Committee members asked how the Department of Revenue would allocate funds if demand exceeded available dollars; Davidson said the bill could be revised to give the department direction on first‑come/first‑served, prorating, or other approaches. Representative Rossi raised the concern that sellers might raise asking prices if buyers could receive rebates; Kibbe said in competitive markets sellers are often focused on offers and may not price to capture a buyer rebate.

No committee vote was taken on House Bill 1450 during the hearing. Representative Davidson said he expects the committee could consider the legislation as early as the week of June, subject to scheduling and room availability; committee staff noted meeting logistics in June could affect exact timing. Several members expressed interest in continuing to refine eligibility criteria, cap/proration language, and fiscal safeguards before a committee vote.