Committee refers House File 177 to taxes after debate on sales-tax exemption for starter homes

The Minnesota House Committee on Housing Finance and Policy on Feb. 19 voted to refer House File 177 to the Committee on Taxes after adopting an amendment that lowers the exemption cap and clarifies how savings should be passed to homebuyers.

The bill, carried by Representative Myers, would exempt a portion of sales tax on construction materials used to build single-family homes intended for first-time homebuyers. An author’s A-1 amendment, adopted in committee, set a cap that the author described as roughly $165,000 of exempted materials on a $500,000 home and included language intended to ensure builders pass savings to buyers. Chair Igoe moved the referral; the committee advanced the bill by voice vote.

Proponents said the exemption could make modest but meaningful reductions in purchase costs. Mark…