SALEM — Some state lawmakers are making another push to create a first-time homebuyer savings account program in Oregon.
The program would allow Oregonians who haven’t owned a home in the past three years to save up to $50,000 in a 10-year period without paying state income taxes on the principal and interest. The money could be used to pay for a down payment on the purchase of a single family dwelling.
Members of the House Committee on Human Services and Housing plan to submit a bill to create the program as early as the next legislative session in February.
Similar legislation stalled in the House and Senate revenue committees earlier this year and never received votes on those chambers’ floors.
Despite a surge in home sales in Oregon, the percentage of first-time homebuyers has declined precipitously since 2009. They represented about 44 percent of the sales in the state that year, but by last year, they accounted for only about 28.8 percent, according to the National Association of Realtors.
Offering the tax exemption would cost the state nearly $4 million in foregone income tax revenue, according to an analysis in March by consultants Lisa Sturevant and Dean Bellas and commissioned by Oregon Realtors.
The program would ultimately boost first-time home purchases and result in positive gains to the statewide economy, the consultants concluded. Farther down the line, the economic prosperity could translate into greater income tax revenue from additional jobs in the construction industry. The study estimated that more than 3,200 Oregonians would start one of the savings accounts, and that at least 161 of those households would purchase a newly-built home in the first five years of the program. The state could expect a $1.26 return for every dollar it invested, the consultants estimated.
Detractors see the program as a tax shelter for wealthy Oregonians.
Chuck Sheketoff, executive director of the Oregon Center for Public Policy, went as far as dubbing it the “Rich Families’ Down-Payment Assistance Program.”
In a blog published on the Blue Oregon website, Sheketoff wrote that it provided a tax loophole for wealthy parents who want to help their children buy a home.
He argued that another Oregon tax-exempt savings programs - the 529 College Savings Network - largely benefits high-income Oregonians.
Montana, Virginia and Colorado offer a first-time homebuyer savings account program of some kind.