Ever heard of a 529 plan? It’s basically a savings plan for college that provides some tax advantages. Rep. Mike Coffman wants to bring the same idea to saving for a house.
Together with Rep. Sean Patrick Maloney (D-NY) and Rep. Barbara Comstock (R-VA), the Aurora Republican reintroduced idea via the ‘First-Time Homebuyer Savings Account Act.’
The pitch is pretty straightforward — houses are expensive, and you need all the help you can get to save up for one.
“The American dream of homeownership is getting harder and harder to attain for those starting out on their own these days, especially Millennials, because of the challenges involved in saving up for the down payment,” Coffman said in a release.
Here’s how it would work, per Coffman’s office:
- “Individuals can put up to $14,000 per year into a first-time homebuyer account with a lifetime investment amount of $50,000.”
- The investment can then grow tax-free up to $150,000 until it needs to be taken out for a down payment on a first home.
- “The designee of the account can be the account holder, a child, a grandchild, a spouse, etc. and can be modified during the life of the account.”
- “The account may be used for a down payment on a first-home and associated closing costs and fees.”
The proposal, House Resolution 2802, has been referred to House Committee on Ways and Means.