Middletown, NY – (RealEstateRama) — Amid a national rental affordability crisis, Representative Sean Patrick Maloney (NY-18) announced his introduction of the bipartisan First Time Homeowner Savings Plan Act. The bill will allow Americans to withdraw up to $25,000 from their IRA for the purchase of their first home without being penalized when they file their taxes. Experts agree that homeownership is one of the best ways for middle class Americans to save for retirement.
“Rental costs are out of control and housing isn’t getting any cheaper,” said Rep. Maloney. “It doesn’t make any sense for the government to penalize people who want to make a smart investment in their first home, and my bill would fix that.”
“I support this bill wholeheartedly because I have three grown children, and they’re about to look for a permanent place to live,” said Assemblywoman Aileen Gunther. “I’m hoping this legislation will pass quickly in Washington – I don’t think anybody could oppose it.”
“Being allowed to invest up to $25,000 is just investing in yourself and your future,” said Orange County Legislator Mike Paduch.“I’m very proud to support it.”
“Homeownership is the American Dream,” said Wallkill Town Councilman Eric Johnson. “At the local level, it builds communities that we need, it builds a tax base, it builds a foundation that makes a safe place to grow up and for families to live.”
“I am thrilled to see Rep. Maloney’s continued and consistent efforts to help residents in the Hudson Valley,” said New York State Association of Realtors Vice President for the Lower Hudson Valley Katheryn DeClerck. “I hope the word gets out to people all around the country to support this bill. Homeownership matters to everybody, it contributes to strong communities, people who purchase a home buy furniture and landscaping and invest in their communities.”
“Homeownership is the foundation of our community,” said Executive Director of the Orange County Rural Development Advisory Corporation Faith Moore. “This provision will be an opportunity to add another tool to our assistance.”
“We strongly support Congressman Maloney’s First Time Homeowner Savings Plan Act,” said Connie Fagan, Director of the Putnam County Housing Corporation. “Putnam County Housing Corporation’s Housing Needs Assessment (January 2014) prepared by the Center for Housing Solutions, Pattern for Progress revealed, Eighty-eight percent (88%) of owners and renters in Putnam county, regardless of income level, are living in Unaffordable and Severely Cost Burdened Housing.’ This bill would assist more young individuals and families in realizing the dream of owning a home in their community.”
High rents and high housing costs are making it increasingly difficult for first-time homebuyers to save money and invest in a home. Experts agree that home ownership is one of the best ways for middle-income families to achieve retirement security. Yet, first-time homebuyers make up only 32% of all buyers, which is the lowest rate since 1987. Additionally, the number of renters dedicating at least half of their income toward housing hit a record high of 11 million people in 2014, according to the Joint Center for Housing Studies of Harvard University.
In 1997, Congress passed legislation allowing first time homebuyers to withdraw up to $10,000 from their IRA without incurring a penalty. Under current law, individuals who withdraw more than $10,000 from their IRA before age 59.5 incur a 10% tax in addition to having the withdrawal subject to income taxes. Rep. Maloney’s First Time Homeowner Savings Plan Act would increase the limit to $25,000 and index it to account for inflation.