Potential homeowners can consider using an Oregon First-time Homebuyers Savings Account (FTHSA) to help save for a new home and possibly reduce their taxes.
In 2018, the Oregon Legislature passed House Bill 4007, which allows Oregon taxpayers to deduct up to $5,000 ($10,000 if filing jointly) per year from their taxable income for deposits and earnings in a FTHSA.
Eligible Oregon residents are those who haven’t purchased or owned a single-family home, either individually or jointly, in the three years prior to the date of their planned purchase of a home in Oregon. Accounts can be set up through any financial institution that offers FTHSAs in Oregon through December 31, 2026.
Funds in a FTHSA can be used for:
- Down payments.
- Closing costs.
- Realtor fees.
- Appraisal costs.
- Loan origination fees.
A FTHSA may be opened anytime through December 31, 2026. Money deposited in the FTHSA must be used to buy a single-family home within 10 years of initially opening the account. If funds are not used to purchase a home, a five percent penalty may be imposed, and taxpayers will be required to add back to their income any amounts previously deducted.
For more information visit, www.oregon.gov/dor and search for “First-time Homebuyers Savings Account.”