SPRINGFIELD — Joined by realtors and advocates at a press conference Thursday, State Senator Cristina Castro outlined legislation she’s sponsoring to incentivize saving for a first home.

“I keep hearing from young people who are starting their professional careers, and a lot of them don’t feel like homeownership is attainable,” said Castro (D-Elgin). “This bill will help them prepare for that, and it will help make owning a home attainable.”

Years of low housing inventory have created an inflationary effect on the housing market in Illinois, driving home prices up by nearly 40% in the last five years. Ballooning prices mean that new homebuyers have to put down more of their savings for down payments, further driving up the burden of buying a home. To address this imbalance, Castro is leading a proposal to help consumers save responsibly and create a pathway to homeownership.

Senate Bill 148 looks to create tax-incentivized homeownership savings accounts at banks, credit unions and other financial institutions. First-time homebuyers would be able to apply for one of these accounts and get rewarded with a tax deduction, up to $10,000 annually for joint filers, for savings they set aside and deposit into the account. Homebuyers would only be able to use the savings in the account for costs associated with buying a home, like down payments — similar to the dedicated use of funds in a health savings account or 529 college savings plan.

“By providing tax savings for new homebuyers, we can give working people, who are budgeting and saving for their first home, a leg up in the process,” Castro said.

Senate Bill 148 is assigned to the Senate Revenue Committee.

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