Last year the Oregon Legislature passed a measure allowing first-time homebuyers (or anyone who has not owned or bought a residence in the last 3 years) to set up a savings account that is free of State Income taxes if it is for the purpose of buying a home. Although this sounds like a great idea on paper, once again, our Realtor Association spent $750K lobbying for a law that will mostly help upper-middle-class Oregonians and will probably not substantially increase home ownership (particularly among the populations that are falling behind).
Considering that most folks who can't afford to buy homes are struggling with crippling college debt, rapidly increasing rent prices and out of control health care expenses, allowing folks to open a savings account with money that they don't have to pay State incomes taxes on is probably not going to help the typical renter struggling to get by make the leap to homeownership. One of the things that this Federal Government shutdown has shown us is how many people are living paycheck to paycheck. They don't have enough savings to weather one month without a paycheck, let alone take on the financial commitment of buying a home. This is becoming the norm, and so measures like this end up helping those that already have the ability to save and may even be receiving money from relatives.
That being said, the second reason most folks will not take advantage of this program is that it is not well known. Folks who have accountants and financial advisors will hear about this and take advantage of it, but everyday Oregonians may not know it exists. So for those of you who have not heard about it, and may be able to benefit from it (or know family members who may be able to), here is a link to the FAQs on the program. As always, give me a call if you have any questions about how to make your first home buying experience the best it can be!