Lawmaker Proposes Savings Accounts for First-time Homebuyers

HARTFORD — State Rep. Tom Delnicki, R-South Windsor, has proposed a bill to establish a first-time homebuyers savings account program geared toward graduates of Connecticut universities and possibly trade schools, with the goal of attracting and keeping young working people in the state.  

“We all know if you become a homebuyer or a condo buyer, you’re more apt to stay in that state, and we keep losing a lot of good folks that are highly educated, that move out of Connecticut. My thought process is let’s do something to try to keep them here. Basically, this will give them a reason to stay in Connecticut, to give them an opportunity to build a nest egg,” said Delnicki, who was re-elected to a third term in 2020. 

Delnicki said he proposed the bill last year, but COVID truncated the legislative session. 

The law would establish a state tax-free account, but participants would still owe federal tax on the funds. 

The initial idea was to limit the program to graduates of Connecticut universities, but Delnicki said he will likely include graduates of Connecticut trade schools as well. 

“Quite frankly I see it as something that could be an incentive for whether you’re a high school trade school or college grad to stay here,” he said. 

Carol Christiansen, president of the Connecticut Association of Realtors, said her organization submitted a similar bill in 2019 that was open to all first home buyers. The program also would have allowed employers to put money into an employee’s qualified account specifically for buying a home. 

“We wanted to have a tax deductible program for somebody that was working in Connecticut to give them incentive to stay in Connecticut, to buy a home in Connecticut,” she said. 

Currently Alabama, Colorado, Iowa, Massachusetts, Minnesota, Mississippi, Missouri, New Jersey, Oregon, and Virginia have first-time homebuyers savings account programs. Bills are pending in Michigan, Nebraska, New York, Pennsylvania, among other states. 

State programs vary in allowed dollar amounts, from a $50,000 cap to unlimited contributions. Some have deadlines of 10 years and others have unlimited timeframes. 

“This is just one more piece of the puzzle on trying to retain bright, intelligent, productive educated folks that grew up in Connecticut that go to school in Connecticut to stay in Connecticut,” said Delnicki. 

He said he is expecting a positive response to the bill, which hopes will help stop the population emigration from Connecticut over the past few years. 

“You know, it’s kind like a boat taking water on. If you don’t pump the water out if you don’t try to do something to save the ship, it’s going to sink,” he said.

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