HB 1607: Georgia First-Time Homebuyer's Savings Account Act; enact

This bill sets up a new type of savings account in Georgia called a first-time homebuyer savings account. Any individual could open one at a bank, credit union, or similar financial institution and name a beneficiary who is a first-time homebuyer (someone who hasn't owned a home in the past three years). Money in the account can only be used for costs tied to buying a single-family residence, such as down payments, closing costs, inspection fees, and mortgage insurance. Account holders could deduct contributions from their state taxable income, up to $6,000 a year for single filers or $12,000 for joint filers, with a lifetime cap of $60,000 or $120,000 per beneficiary, for up to 15 years. Interest and earnings escape state income tax if used for qualified expenses. Withdrawing funds for other purposes triggers added taxable income and a 10 percent penalty, with exceptions for death, disability, or military relocation. The Department of Revenue would create forms and could penalize fraudulent use. The law would take effect January 1, 2027.

• Creates a new type of savings account, the first-time homebuyer savings account, that Georgians can open at banks, credit unions, and other financial institutions.
• Allows account holders to deduct contributions from state taxable income, up to $6,000 for single filers or $12,000 for joint filers per year.
• Exempts interest and earnings on account funds from state income tax when the money is used for qualified home-buying expenses.
• Imposes added taxable income plus a 10 percent penalty on withdrawals not used for qualifying home purchase costs, with exceptions for death, disability, or military orders.
• Requires account holders to report account activity annually to the Department of Revenue and lets the department deny deductions or impose penalties for fraudulent use.
• Exempts financial institutions from having to track, verify, or report how account funds are used.

Georgia residents saving to buy their first home, financial institutions such as banks and credit unions that hold these accounts, and the Department of Revenue, which must create forms, process deductions, and police fraudulent use of the accounts.

Georgians saving for a home purchase could reduce their state tax bill while building savings for a down payment or closing costs. The bill also creates new penalties for misusing the accounts and new paperwork obligations for account holders and the Department of Revenue.

• Code Section 7-11-3 defines key terms including first-time homebuyer (no home ownership in the prior three years) and qualified first-time home expenses like down payments and closing costs.
• Code Section 7-11-4 allows individuals to open accounts, designate a beneficiary by April 15 of the following year, and jointly own accounts if filing joint tax returns.
• Code Section 7-11-5 requires account holders to submit annual account details and expense documentation to the Department of Revenue.
• Code Section 7-11-6 exempts financial institutions from tracking fund use or verifying account compliance and shields them from liability.
• Code Section 7-11-7 sets annual deduction limits ($6,000 single/$12,000 joint) and lifetime caps ($60,000 single/$120,000 joint per beneficiary) claimable for up to 15 years.
• Code Section 7-11-8 imposes a 10 percent penalty plus added taxable income for unqualified withdrawals, with exceptions for death, disability, or military relocation, and allows one tax-free transfer between accounts per year.
• Code Section 7-11-9 lets the Department of Revenue disallow deductions or impose penalties for fraudulent or abusive account use.
• Section 2 sets the effective date as January 1, 2027, applying to taxable years beginning on or after that date.

1. 2026-04-02House Second Readers (Cámara de Representantes)
2. 2026-03-31House First Readers (Cámara de Representantes)
3. 2026-03-27House Hopper (Cámara de Representantes)

• Scott Hilton (R, HD-048)Patrocinador principal
• Chuck Efstration (R, HD-104)
• Sandy Donatucci (R, HD-105)
• Deborah Silcox (R, HD-053)
• Carter Barrett (R, HD-024)
• Jan Jones (R, HD-047)

• homeownership
• state taxes
• savings accounts
• first-time homebuyers
• tax deductions