HI HB2212

Creates a First-Time Home Buyer Savings Account (FHSA) allowing Hawaii residents to contribute pre-tax dollars toward down payments and closing costs for single-family residences.

Permits annual tax deductions of up to $5,000 for individual filers or $10,000 for joint filers, with a 10-year contribution window and aggregate lifetime limit of $50,000 in principal and earnings.

Defines eligible first-time home buyers as individuals who have not owned or purchased a single-family residence within the three years prior to purchase and are Hawaii residents.

Requires tax penalties of 5% on non-qualifying withdrawals during the 10-year period, with exemptions for deceased account holders, those in bankruptcy, or those with permanent disabilities.

Takes effect January 1, 2023, and requires financial institutions to provide annual certificates documenting account creation date, contributions, withdrawals, and account holder information.