A Virginia lawmaker has introduced legislation aimed at easing the path to homeownership by offering a one-time, nonrefundable income tax credit of up to $10,000 for first-time homebuyers.
The proposed credit would be available from 2025 through 2029 and aims to cover home-buying expenses, such as down payments and closing costs.
Democratic Del. Joshua Cole, the lawmaker behind the measure, said he hoped it would be a game-changer for Virginians trying to break into the housing market amid rising prices and limited inventory.
“There are young people who want to be able to start their families and buy a home,” Cole said. “There are a bunch of millennials who have a well-paying job, but they’re living in their parent’s basement.”
The tax credit would be capped at $10,000 per household and is designed to apply only to those purchasing residential property for the first time.
To ensure long-term investment in the community, Cole said the proposal includes a provision requiring people who receive the tax credit to repay the credit if they sell the property within three years of buying it.
The program could help thousands of Virginians who struggle to save for a down payment, especially in high-cost areas such as Northern Virginia, according to Cole, who added that he believes it will have bipartisan support.
“I’ve had some conversation with other colleagues, and they’re already excited,” Cole said. “As soon as I mentioned this, their ears perk up.”
A similar bill offering a $5,000 tax credit was introduced in the General Assembly last year, but it did not have enough support to move forward.
Cole said he thinks the new bill makes more sense.
“We tried to get it up just a little bit to provide more assistance,” Cole said. “We agreed that we would continue to do some work behind the scenes and bring it back again.”
Virginia state lawmakers were supposed to begin their 2025 session Wednesday, but that was postponed until early next week due to citywide water disruptions in Richmond caused by the recent winter weather.
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