New Jersey Senate Bill S1391

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24
• Report Pass: 6/5/25
• Refer: 6/5/25

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

Key aspects of the bill include offering a gross income tax credit for first-time home buyers who make contributions to their savings accounts. Specifically, buyers will be eligible for a five percent credit on contributions of up to $15,000 (or $7,500 for married individuals filing separately). Additionally, any earnings from the account will be exempt from gross income until withdrawn, promoting long-term savings. This initiative is expected to positively impact the housing market by increasing home ownership rates among young and first-time buyers in New Jersey.

Summary

Senate Bill S1391 establishes the New Jersey First-Time Home Buyer Savings Account Program, aimed at encouraging first-time home buyers to save for their initial home purchase. The program will be administered by the New Jersey Housing and Mortgage Finance Agency, which will oversee applications, certifications, and compliance with the initiative. The intent is to facilitate home ownership by providing tax benefits for contributions made to designated savings accounts, thus making home purchases more financially accessible for new buyers.

Contention

While the bill aims to create pathways for new home buyers, there are points of contention surrounding the potential limitations imposed on individuals who withdraw funds for unauthorized purposes. A penalty of ten percent applies to funds withdrawn for non-eligible expenses, which could deter some potential buyers from utilizing the accounts. Opposition voices may highlight concerns about such penalties impacting financial flexibility, particularly for low-income families who may face unforeseen expenses.