About the account
Oregon allows a subtraction for amounts you deposited during the tax year into a designated First-Time Home Buyer Savings Account, along with any earnings on your deposits.
A first-time home buyer account can be opened any time between January 1, 2019 and December 31, 2026. You
can create a first-time home buyer account by opening an account at any
financial institution and using Form OR-HOME to designate that account as your first-time
home buyer account.
How to set up an account
Anyone planning to purchase a home in Oregon or who wants to save on behalf of someone else who is planning to purchase a home in Oregon can set up an account.
You can set up a first-time home buyer account at any financial institution you choose. The financial institution does not need to know that the account is a first-time home buyer account; you open the account like you would any other account. After you open the account, fill out Form OR-HOME to designate that account as your first-time home buyer account.
Keep Form OR-HOME with your account statements and any tax forms related to the account that you receive from the financial institution. We may ask for these items later.
How to use an account
You must use money deposited in the account to pay for qualifying costs of buying a single-family home within 10 years of opening the account. You can use the account to save for your own home purchase or for the home purchase of a qualified beneficiary. In addition, the individual purchasing the home can't have owned or purchased a residence in the three years prior to the date of their planned purchase.
What you can pay for
You or your beneficiary must use the funds in the account to pay costs associated with buying a home, such as:
- Down payment
- Title insurance and other closing costs
- Realtor commissions
- Appraisal and inspection fees
- Loan origination fees
How much you can save
For 2025, account holders may subtract up $6,125 in contributions and earnings, or up to $12,245 for those filing a joint return. Account holders may subtract contributions and earnings for up to 10 years or until an aggregate total of $50,000, or $100,00 for joint filers, is reached. The maximum subtraction amount is also limited by federal adjusted gross income.
Frequently asked questions
Qualified beneficiary
A qualified beneficiary is someone that you designate as the intended recipient of funds withdrawn from your first-time home buyer account. You make the designation on Form OR-HOME. You can make this designation when you designate the account as your first-time home buyer account, or you can choose a qualified beneficiary at a later date.
A qualified beneficiary cannot have their own first-time home buyer account or be the qualified beneficiary on more than one account. It is important to make sure your qualified beneficiary understands these requirements before you designate them as the beneficiary on your account.
No, you may only have one first-time home buyer account at a time.
Penalties
You
or your qualified beneficiary must use the funds in a first-time home buyer account
to purchase a home within 10 years of opening the account (the original
account, if funds were later transferred to another account). If you withdraw
the funds within 10 years of opening the account for a reason other than buying
a home, you will be required to pay a penalty for the nonqualified withdrawal.
In addition, if you remove the funds at any time without purchasing a home,
you'll need to report the amounts you previously subtracted as an addition on
your tax return. The addition to your income occurs in the year that you withdraw
the funds from the first-time home buyer account for a nonqualifying purpose
(for example, you use the funds to pay for college tuition).
The penalty is 5 percent of the funds withdrawn from the first-time home buyer account within 10 years of opening the account and used for an unrelated purpose, even if they aren't subtracted on a return. You must also add back any amount that was subtracted on an earlier return when you file your return for the year of the withdrawal.
For example, during 2025, you contribute $6,125 to a first-time home buyer account and claim the maximum subtraction for your contributions on that year's return. The account earns $150 in interest that year, but the interest can't be subtracted because the total amount of your contributions and interest earned ($6,125 + $150 =$6,275) is more than the maximum subtraction amount. During 2026, you withdraw all $6,275 from the account and use it to pay for college tuition. You must pay a penalty of 5 percent of the total amount withdrawn, or $314 ($6,275 x 5 percent), when you file your return for the withdrawal year. You must also add back $6,125 on your return for the subtraction you claimed.
Yes.
The penalty won't be imposed on funds that are withdrawn if the account holder has
died, has filed for protection under the U.S. Bankruptcy Code, or has lost
function of any portion of the body that permanently incapacitates them from
regularly performing work at a gainful occupation. Also, if the funds are
withdrawn more than 10 years after the account is opened, they won't be subject
to a penalty. However, you'll still be required to add back any previously
subtracted contributions and earnings.
Subtractions
Yes.
If you or your beneficiary don't purchase a home in Oregon, you don't qualify
for the subtraction and you will be required to add back any amounts you
subtracted on previous tax returns. You may also be subject to a penalty
on funds withdrawn for a nonqualifying purpose.
The maximum subtraction for 2025 is $6,125 ($12,245 if you file a joint return and both you and your spouse each have a first-time home buyer account, or you are both owners of a joint account). You may not subtract more than $50,000 ($100,000 for joint filers) in total for all tax years. Income limitations apply. If your income is more than $104,000 ($149,000 for joint filers), the amount of the subtraction is reduced. See Publication OR-17 for details.
Yes.
However, they won't be able to claim a subtraction for any funds they
contribute, even if they are the qualified beneficiary of your account. In
addition, you won't be able to claim a subtraction for contributions you don't
personally make. You will be able to claim a subtraction for any earnings
(interest or dividends) from the account.
Amounts
contributed can't be carried forward to the next tax year if you weren't able
to use the subtraction or reached the maximum amount allowed.
Transfers
You're allowed to transfer the funds in your first-time home buyer account to another first-time home buyer account without reporting it as a nonqualified withdrawal or incurring a penalty. However, you can't have two first-time home buyer accounts open at the same time. The original first-time home buyer account must be closed before you can designate another first-time home buyer account, and the funds must be transferred within 60 days of closing the original account. Don't subtract transferred funds that have already been subtracted.
You're
allowed to transfer funds from your joint first-time home buyer account to separate
first-time home buyer accounts without reporting it as a nonqualified
withdrawal or incurring a penalty. See the FAQ above for transfer requirements.