PA HB818

Establishes the First-time Homebuyer Savings Account Program within the Pennsylvania Treasury Department, allowing individuals to open tax-advantaged savings accounts for down payments and closing costs on a first home in the Commonwealth

Annual contributions are tax-deductible up to $5,000 for individual filers or $10,000 for joint filers, with a maximum lifetime contribution of $150,000 and tax-deductible principal capped at $50,000 over 10 years

Account earnings are excluded from state taxable income when used for eligible home purchase costs; funds must be used within 10 years or remaining balances become taxable as interest income

Withdrawals for non-eligible purposes trigger inclusion in taxable income plus a 10% penalty, with exceptions for death, disability, or bankruptcy

Selling or leasing the purchased residence within three years of settlement constitutes an "ineligible use" requiring the withdrawn amount to be included in taxable income, though hardship waivers are available for job loss, death of income earner, employment transfer, or other economic hardship