UPDATED: Fact Sheet on First-Time Homebuyer Savings Account Act

On April 10, 2026, Nebraska lawmakers approved State Treasurer Joey Spellerberg’s First-Time Homebuyer Savings Account Act. The Act was included as a key provision in LB 803, the Revenue Committee’s priority package, which passed 48-1. The governor signed the bill April 16, 2026.

The First-Time Homebuyer Savings Account Act (“the Act”) was introduced at the request of the Treasurer by Senator Bob Hallstrom. The bill was prioritized by Senator Jared Storm. Co-sponsors were Senators Teresa Ibach, Carolyn Bosn, Tony Sorrentino, Barry DeKay, Dave Murman, Loren Lippincott, Bob Andersen, Brian Hardin, John Cavanaugh, Robert Dover, Eliot Bostar, Danielle Conrad, Dave Wordekemper, Kathleen Kauth, Jared Storm, Victor Rountree, and Jason Prokop.

Why the Act Is Needed

• Nebraska’s median home price has surged from $155,000 a decade ago to around $290,000 today.
• The National Association of REALTORS^® reports that the share of first-time homebuyers dropped to a record low of 21% of all sales in 2025 – historically closer to 40%. The average age of a first-time buyer has climbed to a record 40 years old, compared to 30 years old in 2010.

• The Act is intended to help first-time buyers save for down payments and closing costs.

How the Accounts Will Work

Nebraska First-Time Homebuyer Savings Accounts will offer tax advantages for contributions and earnings. Funds can remain in the account indefinitely without penalty or recapture if eligibility requirements are met. The proposal is designed to help more Nebraskans address one of the biggest barriers to homeownership: saving for a down payment and closing costs.

• The Accounts: Starting January 1, 2027, individuals can open and designate a First-Time Homebuyer Savings Account with a financial institution.
• Contribution Limits: 
• Individuals: Up to $5,000 per year (Lifetime limit: $25,000).
• Married Couples: Up to $10,000 per year (Lifetime limit: $50,000).
• Tax Benefits:
• Contributions are fully deductible from Nebraska income taxes.
• Interest and earnings grow state tax-free when used for qualified expenses.
• Qualified Expenses: Funds may be used for down payments, closing costs, and fees for inspections, appraisals, or mortgage origination when purchasing a home in Nebraska — or for down payment costs and financing fees associated with constructing a primary residence in Nebraska.
• Reporting: Using a form created by the Nebraska Department of Revenue, the account holder will be responsible for documenting the First-Time Homebuyer Savings Account, how the funds are used, and any supporting documentation required by the Department. Account holders must file documentation with state income tax returns to qualify for the tax benefit. 
• Financial institutions will not be required to designate the account as a First-Time Homebuyer Savings Account for the taxpayer or report to the Department of Revenue beyond what is normally required by law. They will also not be liable for determining eligibility for tax benefits or tracking eligible usage of funds.
• Guardrails: To prevent misuse, the Act includes recapture of tax benefits if funds are withdrawn less than a year after the first deposit or are used for non-eligible purposes. Additional financial penalties could be applied if funds are used for non-qualifying purposes.

Definitions

• First-time homebuyer: Someone who has never owned a primary residence (or who has not been listed on a property title for at least three consecutive years following a divorce).
• Qualified beneficiary: A first-time homebuyer designated by the account holder who will use the funds for eligible expenses.
• Eligible expenses: Down payments and closing costs (e.g., appraisal fees, mortgage origination fees, inspection fees) tied to the purchase or construction of a primary residence in Nebraska.

Estimated Tax Savings

  Example 1: Single Nebraskan making $70,000 per year

• Maximizes the annual savings limits, saving $25,000 over five years.
• Account earns 3%.
• The Act takes effect in 2027. Nebraska's top personal income tax bracket will be 3.99%.

  Example 2: Married Nebraska couple earning $100,000 combined per year

• Maximizes the annual savings limits and saves $50,000 over five years.
• Account earns 3%.
• The Act takes effect in 2027. Nebraska's top personal income tax bracket will be 3.99%.