SPRINGFIELD, Ill. (WAND) — State lawmakers can pass a bill this spring to create an Illinois home buyer savings account program.
First-time and second chance home buyers would be able to receive a tax credit if they open special savings accounts to buy homes in the future.
Sen. Cristina Castro (D-Elgin) told reporters Thursday that providing tax savings for new home buyers can give working class families a leg up in the process.
"Eligible first-time and second chance home buyers would be able to open a designated savings account and receive a tax deduction for contributions to the account up to $5,000 annually for single filers and $10,000 annually for married joint filers," Castro said.
The Illinois Realtors Association said this plan could help individuals save up to $25,000 and families save roughly $50,000 to put toward a down payment and closing costs.
Rising prices have forced many new homeowners to have to put down more of their savings for down payments. Realtors explained that has further driven up the burden of buying homes.
"First-time buyers can get loans with as little as 5% down. Actually, with FHA and VA loans, it's 3% down," said real estate agent Michael Oldenttel. "So, we don't have to wait that long in order to build up enough funds in order to get the home or condominium financed. This will help speed up the entire process. Now someone can save up money and get a tax credit and then get into their first home."
Home buyers would only be able to use the savings account for costs associated with buying a home, similar to a health savings account or 529 college savings plan.
Senate Bill 148 is currently assigned to the Senate Revenue Committee.
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