New Jersey Senate Bill S335

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22
• Report Pass: 1/12/23
• Refer: 1/12/23

Caption

Establishes New Jersey First-Time Home Buyer Savings Account Program; provides gross income tax benefits for certain contributions to and earnings on assets maintained in accounts established under program.

Impact

The bill places the administration of this program under the New Jersey Housing and Mortgage Finance Agency, which will oversee the certification of first-time home buyers and manage agreements with financial institutions. By establishing this program, the state aims to stimulate home ownership, particularly among younger residents and those with limited financial resources. The benefits of this initiative could potentially increase home ownership rates within the state, impacting both the housing market and the local economy positively.

Summary

Senate Bill 335 aims to establish the New Jersey First-Time Home Buyer Savings Account Program. This program is designed to encourage individuals in New Jersey to save for the purchase of their first homes by providing specific gross income tax benefits. The bill allows certified first-time home buyers to receive a tax credit equal to five percent of their contributions, up to $15,000 per year (or $7,500 for married individuals filing separately) into a designated savings account. Additionally, the earnings on these accounts would be tax-free until they are distributed for qualified expenses related to home purchases.

Contention

Some points of contention surrounding the bill may include concerns related to the long-term implications of incentivizing home buying without addressing other underlying issues such as housing affordability and availability. Additionally, there may be discussions regarding whether the tax benefits primarily favor individuals with higher incomes who can afford to save larger sums for down payments. Establishing criteria for being classified as a 'certified first-time home buyer' also leads to conversations about access and equity, particularly for those who have faced barriers to home ownership in the past.