Rhode Island General Assembly

Office of the House Minority Caucus

 

Representative Newberry Submits Legislation to Assist First Time Homebuyers

 

State House, Providence – The median price for a single-family home in Rhode Island hit a record high of $443,000 in July 2023, and most recently was reported to have risen to $450,000. Despite two significant housing packages that passed the General Assembly in 2022 and 2023, there is no relief in sight for the housing crisis in Rhode Island. Further, exacerbating the crisis, rental unit vacancies in Rhode Island remain historically low, further driving up the cost of housing as rental units can charge more due to limited inventory. Nationally, including Rhode Island, single family homeownership rates have declined, returning to 1980 levels.

In an effort to assist first time homebuyers, Representative Brian C. Newberry (District 48, N Smithfield/Burrillville) submitted legislation that would establish the Rhode Island First Time Homebuyer’s Savings Account Program. The program would be administered by the General Treasurer, similar to the 529 Education Savings Account program that allows individuals to save towards a college education.

The bill would allow an individual household to save up to $50,000 in contributions to the account, tax free; and up to $150,000 in interest and dividends earned, tax free, towards the purchase of a home. The account could only be used for the purchase of a home. If an individual withdraws funds for any other use, then that amount would be taxed as income.

“The Rhode Island housing crisis continues to rage on despite two housing crisis legislative packages passed by the General Assembly,” said Representative Newberry. “The main barriers to home ownership continue to include housing inventory and price. In an effort to try and help potential homeowners overcome the cost barrier, we think it is prudent to allow first time homeowners to save towards a down payment on a home. Fourteen states to date have passed legislation allowing first time homebuyers to save (including interest and dividends earned) tax free towards the purchase of a home. It is time for Rhode Island to offer the same for those trying to obtain a home of their own.”

 

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