(WXYZ) — The Michigan Senate has approved legislation that aims to make buying a home in Michigan more affordable for first-time homebuyers.
Senate Bill 146 would provide an income tax deduction of up to $5,000 for a single filer or $10,000 for joint filers on contributions made to a first-time homebuyer savings account.
"Many folks seeking to buy their first home are concerned they don’t have enough money for a down payment,” said Sen. Jim Runestad, who sponsored the bill. “This bill and its companion measure will make a real difference for families in our community by enabling residents to establish a savings account to help them achieve their goals
Additionally, Senate Bill 145 would enable residents to start Michigan First-Time Home Buyer Savings Accounts.
Comparable programs across the nation allow money to be set aside and deducted from income tax for the purpose of down payment and closing cost assistance related to first-home purchases.
“These accounts operate in a similar fashion to education savings plans, and those have proven to be extremely beneficial in assisting with higher education costs,” Runestad said. “It is a smart approach to making housing affordable for the next generation of homebuyers.”
The legislation sets an account maximum of $50,000 and would enable residents to establish the accounts starting Jan. 1, 2022.
SB 145 and SB 146 have been sent to the House of Representatives for further consideration.