A BILL to amend and reenact §§ 36-171 and 36-173 of the Code of Virginia, relating to first-time home buyer savings plan; townhouses; principal limits.
HB183 revises Virginia’s first-time home buyer savings account program. The bill expands the definition of “single-family residence” to expressly include townhouses, along with manufactured homes, trailers, mobile homes, condominium units, and cooperative housing. It also updates the account rules to allow a larger amount of money to be saved and retained in these tax-advantaged accounts.
Under the substitute, the aggregate principal contribution limit increases from $50,000 to $100,000 per account, and the maximum amount that may be retained in the account increases from $150,000 to $200,000. The bill continues to exclude interest and other income earned in the account from Virginia taxable income, and it preserves the existing framework for qualified beneficiaries, eligible costs, and financial institution responsibilities.
The bill amends §§ 36-171 and 36-173 of the Code of Virginia, changing the statutory definitions and tax treatment for first-time home buyer savings accounts. Its practical effect is to broaden eligibility for the program by including townhouses in the definition of a qualifying residence and to increase the savings thresholds available to account holders. It affects first-time home buyers, account holders, financial institutions, and the Department of Taxation by adjusting the limits and maintaining the income tax exclusion for account earnings.
The available legislative history suggests generally favorable support for the bill. The House Committee on Appropriations advanced the substitute version, and the bill was continued to the next session in Finance and Appropriations on a 15-0 vote, indicating no recorded opposition in committee. The absence of recorded dissent or transcript debate suggests the measure was viewed as a targeted expansion of an existing homeownership incentive rather than a controversial policy change.
The main policy changes are the higher principal and retention limits and the explicit inclusion of townhouses as eligible residences. Those changes could matter to fiscal policymakers concerned about the size of the tax preference and to housing advocates focused on expanding access to homeownership. The bill also preserves language limiting financial institutions’ administrative duties and liability, which reduces compliance burdens and likely avoids contention from the banking sector. No specific objections are reflected in the provided record.