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Bill to let first-time buyers deduct contributions to state savings accounts advances in hearing; housing groups back plan
Summary
Sen. John Kavanaugh told the Revenue Committee LB151 would create a state-tax-deductible savings account for first-time homebuyers to use for down payments and closing costs, with annual and lifetime contribution caps and qualified-distribution rules.
Sen. John Kavanaugh introduced LB151 to create a state tax-preferenced savings account for first-time homebuyers. The proposed account would allow contributors to deduct up to $2,000 annually (or $4,000 for married filers) from taxable income, with lifetime contribution limits (proposed at $20,000 and $40,000 for married filers in the draft) and qualified-distribution rules similar to other tax-advantaged accounts.
The intent: help first-time buyers reach the upfront costs of home purchase, such as down payments, earnest money, prepaid property taxes and homeowners insurance at closing, and required reserves. Kavanaugh said the accounts would operate similarly to…
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