Gov. Laura Kelly on Monday signed a bill creating what will essentially be a 529 college savings account for first-time home buyers at a time when housing prices are soaring.
The bill would allow anyone purchasing a home in Kansas for the first time to make tax-deductible deposits as they save for a new home.
It’s emblematic of a trend seen nationally as states such as Iowa, Colorado, Oregon have passed similar bills.
Lawmakers in Michigan and Ohio are considering comparable legislation.
Fiscal analysts estimate that there were 15,438 homes purchased in Kansas last year by first-time home buyers.
The bill is estimated to cost the state about $3.5 million a year in revenue.
Nationally, first-time buyers made up 31% of all home buyers in 2020, a dip from 33% in 2019, according to the National Association of Realtors.
The average first-time buyer was 33 years old, the association reported.
The National Association of Realtors reports that median existing-home sales price rose in March by a record-breaking 17.2% to a historic high of $329,100.
A year earlier, the median price was $280,700.
The bill allows Kansans to set up savings accounts at financial institutions starting July 1, 2022.
Contributions will be limited in each tax year to $3,000 for individuals and $6,000 for a married couple filing a joint return.
The maximum amount of contributions in all tax years would be limited to $24,000 for individuals and $48,000 for a married couple filing a joint return.
The maximum amount in a first-time home buyer savings account could not exceed $50,000.
The bill was initially introduced last year by Republican leadership, but it failed to advance when the legislative session ended prematurely because of the pandemic.
The bill was backed this year the Kansas Future Caucus, led by a bipartisan group of young lawmakers.
The bill passed 119-3 in the House and 35-1 in the Senate.
In other action, the governor signed:
- A bill removing the spousal exception for sexual battery. Supporters of the bill said it sends a message “that violence is no less harmful when it happens at the hands of someone a victim loves and trusts.” The legislation also creates the crime of sexual extortion and requires an offender to register under the Kansas offender registration act. The bill also prohibits a court from requiring psychiatric or psychological examinations of an alleged victim of any crime. It also increases criminal penalties for fleeing or attempting to elude a police officer when operating a stolen vehicle. The bill passed unanimously in the Senate and 118-3 in the House.
- A bill increasing the criminal penalty for mistreatment of a dependent adult or senior who lives in an adult care home. The bill passed unanimously in both chambers.
- A bill requiring paid tax return preparers to sign any return that they prepare – or substantially prepare – and to include their federal tax identification number. Failure to comply could be subject to a fine of $50 per return and a maximum of $25,000 penalties per year. The bill also authorizes, nonrefundable income tax contributions to the Eisenhower Foundation. Credits would be capped at $25,000 for any individual. The bill passed unanimously in the Senate and 107-14 in the House
- A bill extending the Kansas Closed Case Task Force to October 1, 2021, for completing a protocol implementation plan relating to closed cases. The bill also extends to Dec. 1, 2021 the deadline for the task force to finish a report containing a plan for the uniform implementation of the protocol. The bill passed 115-6 in the House and unaninmously in the Senate.
- A bill changing changing the renewal deadlines for permits and registration for livestock and domestic animals.The deadlines would be moved from June 30 to Sept. 30 of each year. It also allows the animal health commissioner to recover the actual cost of official calfhood vaccination tags. Bill passed 117-7 in the House and 35-5 in the House.
- A bill enacting the psychology interjurisdictional compact to provide for interjurisdictional authorization to practice telepsychology and temporary in-person, face-to-face psychology. It also enacts the physical therapy licensure compact and authorizies criminal history record checks in the Physical Therapy Practice Act. The bill passed unaninmously in the Senate and 119-4 in the House.
