ST. PAUL, Minn. — Two bipartisan bills advancing through the Minnesota House aim to provide homebuyers with a tax break on construction materials, a move that could impact housing affordability and homeownership rates.

The proposal, backed by Republican Rep. Andrew Myers of Tonka Bay, would exempt first-time homebuyers from paying sales tax on the first $165,000 of construction costs.

“This would offer financial relief for first-time buyers, making homeownership more attainable,” Myers said.

However, some lawmakers question the impact of the proposed tax exemption.

“I’m not sure how the bill will incentivize building more starter homes if the credit goes to the buyer instead of the builder, and the state could be looking at a hefty price tag,” said Democratic Rep. Michael Howard of Richfield.

Potential Impact on Housing and Affordability

With rising home prices and material costs straining the housing market, lawmakers are seeking solutions to make homeownership more affordable—particularly for first-time buyers.

🔹 Benefits for buyers: The proposed exemption would lower upfront costs for those looking to purchase a new home.
🔹 Debate on effectiveness: Some argue that a tax break for builders might be more effective in encouraging new construction, rather than shifting savings to buyers.
🔹 Fiscal considerations: Critics point out that the state could face significant revenue losses if the bill passes.

What’s Next?

The bills are now headed to the House Taxes Committee, where lawmakers will further debate their financial impact and potential revisions before moving forward.

If approved, the legislation could reshape Minnesota’s approach to housing incentives and provide a new financial tool for prospective homeowners in the state.

Originally reported by KFGO.