Oregon offers first-time homebuyers savings accounts

Potential homeowners can consider using an Oregon First-time Homebuyers Savings Account 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.”