Rep. Tim Moore (R., N.C.) is spending National Homeownership Month by working to reform America’s housing system.
In order to do that, Moore rolled out the Unlocking Homeownership Act alongside Rep. Mike Lawler (R., N.Y.) that would allow first time homebuyers to use funds from 529 savings plans without incurring any tax penalties. Their bill was obtained first by the Washington Reporter.
Right now, 529 accounts are mainly used for certain education expenses, and withdrawals from 529s are often subjected to taxes and penalties. If Moore and Lawler get their way, that will be a thing of the past.
“Too many young families feel like homeownership is moving further out of reach despite doing everything right,” Moore told the Reporter. “This legislation recognizes that Americans who have saved responsibly should have more flexibility in how they use those savings when purchasing their first home.”
Industry groups, like the National Association of Realtors (NAR), called the legislation “a commonsense proposal that expands pathways to homeownership by allowing tax-free 529 education plan distributions for first-time homebuyers.”
NAR thanked Reps. Moore and Lawler for rolling out the bill, and further explained why it is necessary.
“By treating these distributions as qualified under Section 529, with clear timing and usage requirements that mirror the successful IRA first-time homebuyer approach, this legislation would enable families with excess education savings funds to use them as into a down payment and move into homes of their own,” NAR’s Executive Vice President and Chief Advocacy Officer Shannon McGahn, said. “NAR believes policies that broaden access to homeownership are critical to strengthening communities and expanding economic opportunity for Americans striving to achieve the dream of owning a home.”
