LANSING, Mich. — Michigan residents would be able to set up a savings account to help cover the costs of a first-time home purchase under legislation co-sponsored by Sen. John Proos. The measures would also provide a state tax deduction for contributions to the savings account.
“This initiative is about promoting smart homeownership, attracting new talent and encouraging new generations of Michigan residents to stay and grow roots in our state,” said Proos, R-St. Joseph. “I was proud to co-sponsor this positive legislation to achieve those goals by helping residents save enough money to buy their first house.”
Senate Bill 511 would create the Michigan First-time Home Buyer Savings Program. It would allow an individual to open an account with a financial institution and designate it as a first-time homebuyer savings account. Funds in the account could be used toward a down payment or allowable closing costs for a first-time home purchase in Michigan.
SB 512 would provide a state income tax deduction of up to $5,000 for a single return and $10,000 for a joint return for contributions made into a first-time homebuyer savings account for up to 20 years.
If a withdrawal is made for a non-qualifying purpose — something other than a down payment or closing costs for a first home purchase — the withdrawn amount would be added to the taxpayer’s adjusted gross income.
“Often concerns about being able to afford a responsible down payment hold back prospective first-time homebuyers,” Proos said. “This is compounded by our state’s booming housing market. Although increasing property values are good for homeowners, schools and local communities, they make it harder for young professionals and new families to afford to buy. That is where this savings program would help the most.”
As a member of the Senate Finance Committee, Proos recently voted to approve the bills and send them to the full Senate for consideration.
Editor’s note: Audio comments by Proos are available at www.SenatorJohnProos.com/Audio.