A bill giving first-time homebuyers a credit on the state realty transfer tax was approved Wednesday by the House Finance Committee.

The committee voted 23-3 for an amended House Bill 1450 sponsored by Rep. Nathan Davidson, D-Dauphin, enabling those buyers to apply for a $2,500 rebate on the one percent tax levied at closing time.

The committee voted unanimously for an amendment specifying that first-time homebuyers are eligible for the rebate. If a rebate recipient sold a home within five years, they would pay back a pro-rated share of the rebate under the amendment.

This amendment by Rep. Tom Kutz, R-Cumberland, replaces original language giving the rebate to new state residents or current residents who haven’t purchased a home in the prior five years.

The proposed rebate would apply to a primary residence. The state treasury would run the program.

The treasurer would deposit ten percent of the annual revenue collected by the 1% realty transfer tax into a homebuyer rebate program fund.

If enacted, HB1450 would generate at least $53 million annually for the program helping an estimated 21,000 homebuyers, said Committee Majority Chair Steve Samuelson, D-Northampton.

Davidson said the bill will help homebuyers and get the housing market moving.

Rep. Leslie Rossi, R-Westmoreland, voted against the bill.

She said the issue is important, but sellers could boost the sale price knowing a rebate is available.

Different proposals

With housing costs skyrocketing amidst a tight market, there are several proposals before lawmakers to help first-time homebuyers.

The Senate Urban Affairs and Housing Committee approved Senate Bill 815 last spring exempting first-time homebuyers from paying the realty transfer tax.

SB815 is before the Senate Appropriations Committee.

The House approved House Bill 818 last spring.

HB818 enables first-time homebuyers to open a state-run savings account to help with their purchase.

HB818 sponsored by Rep. Ryan Bizzarro, D-Erie, would establish the tax-exempt savings account under the treasury.

Gov. Josh Shapiro proposed $10 million for state grants to help first-time homebuyers with closing costs, including a down payment, as a way to help move people out of the rental market.

That proposal didn’t make it in the compromise state budget for Fiscal Year 2025-26 enacted last month.