By State Treasurer's Office
LINCOLN, Neb. — The Nebraska Legislature has given final approval to a new plan that will help more Nebraskans achieve the American dream of homeownership.
The First-Time Homebuyer Savings Account Act — originally proposed as LB 938 on behalf of State Treasurer Joey Spellerberg — authorizes tax-advantaged accounts for Nebraskans to save for their first home. The text of LB 938 was included as a key provision in LB 803, the Revenue Committee’s priority package, which has been sent to Gov. Jim Pillen for his consideration.
Introduced by Sen. Bob Hallstrom and prioritized by Sen. Jared Storm, the First-Time Homebuyer Savings Account Act was co-sponsored by more than one-third of state lawmakers. The bill was endorsed by a dozen organizations, including the Nebraska Economic Developers Association, Nebraska Bankers Association, the Platte Institute and the Nebraska Commission on African American Affairs.
“This is a fiscally responsible way to help Nebraskans keep more of their hard-earned money and secure a first home,” Treasurer Spellerberg said. “With the passage of this bill, we’re sending a clear message to younger Nebraskans: we want you to live, work and raise your family right here in the Cornhusker State.”
Key Provisions of the Plan
- Account Opening: Beginning Jan. 1, 2027, individuals will be able to open and designate a First-Time Homebuyer Savings Account at the financial institution of their choice.
- Contribution Limits: Individuals may contribute up to $5,000 a year ($25,000 lifetime limit), while married couples filing jointly may contribute up to $10,000 a year ($50,000 lifetime limit).
- Tax Advantages: Contributions will be deductible from Nebraska income taxes. Additionally, all interest and earnings will grow state tax-free when used for qualified expenses.
- Eligible Uses: Savings can be applied toward down payments, closing costs, inspection fees and appraisals, as well as costs associated with financing the construction of a primary residence within the state.
Who Qualifies?
A first-time homebuyer is defined as an individual who has never owned a primary residence, or an individual who has not been on a property title for at least three years following a divorce.
Estimated Savings Examples
- Single Taxpayers: Could save an estimated $1,100 in Nebraska state income taxes over five years by maximizing the $25,000 savings limit, based on Nebraska’s top income tax bracket of 3.99% in 2027.
- Married Couples: Could save an estimated $2,200 in Nebraska state income taxes over five years by maximizing the $50,000 savings limit, based on Nebraska’s top income tax bracket of 3.99% in 2027.
“When Nebraskans buy or build a home in our state, they invest in their community,” Spellerberg said. “Homeownership is also critical to building long-term personal wealth, but young Nebraskans need to enter homeownership on firm financial footing. Passage of the First-Time Homebuyer Savings Account Act helps make that possible.
“I want to thank the senators who supported this plan to address real challenges facing everyday Nebraskans.”
A fact sheet on the First-Time Homebuyer Savings Account Act is available in the “news” section at treasurer.nebraska.gov.