During the short 2018 Legislative Session, the Oregon Legislature took a significant step toward addressing the state’s affordable housing crisis by passing House Bill 4007, establishing a First-Time Home Buyer Savings Account program statewide. The program will allow Oregonians to take a state tax deduction for saving money towards a down payment and other related costs associated with the purchase of their first home. Polling indicated that 86 percent of Oregonians viewed saving enough for a down payment and closing costs as a significant obstacle to buying a home, prompting the Oregon Association of REALTORS® (OAR), among other prominent housing and related industry groups, to support the legislation.
The program takes applies to tax years beginning on or after January 1, 2019. The Oregon Department of Revenue has issued rules regarding the program. The rules provide the responsibilities for banks and credit unions to provide annual statements to account owners who have made qualifying deposits. Qualified savings would be held in a special account opened at any Oregon bank or credit union. Deposits into the account would be tax deductible up to $5,000 a year for individual filers and $10,000 a year for joint filers, with a maximum contribution of $50,000 over 10 years; interest earned on the account also would be tax free. Funds in the account must be used for a down payment or other closing costs associated with the purchase of an existing home or construction of a new home, of any type, and could only be used by people who have never owned a home or who have not owned a home in the last three years.
The Oregon Association of REALTORS will be providing information to our members and future homebuyers as lenders provide offer the accounts to their customers.