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We know that homeownership strengthens communities and provides stability for families- and owning a home is a key part of building net worth and financial strength.
But saving enough money for a down payment and closing costs is hard- especially for young people and those looking to buy their first home. High rents, student loan payments and low paying jobs are tough obstacles to overcome. Many people don’t know where to start.
That’s why the Minnesota REALTORS and BATC created the First-Time Homebuyers Savings Account- a new idea to help prospective home buyers and those looking to get back into the market to start saving for a home. The creation of the First-Time Homebuyer Savings Account was the #1 legislative priority of BATC and the Minnesota REALTORS for the 2017 Minnesota Legislative Session.
Both the Minnesota House of Representatives (95-29) and Senate (44-20) have now voted to send HF 1, the Omnibus Tax Bill to Governor Mark Dayton. This bill contains the First-Time Homebuyer Savings Account provision.
This provision provides a state tax deduction on interest earned in the account. Up to $14,000 for individuals and $28,000 for married joint filers can be contributed per year. For all years, contributions are limited to $50,000 for individuals and $100,000 for married joint filers.
The money in the first-time homebuyer savings account may be utilized for a down payment or closing costs for a single family residence or a qualified beneficiary. They include paying construction costs if a new home is constructed, as well as purchasing an existing home. Not only can young people create these accounts and contribute, but parents and grandparents can contribute as well.
Governor Dayton is expected to act on the bill in the coming days. Thank you to the initiative’s authors, Representative Greg Davids (R-Preston) and Senator Karin Housley (R-St. Mary’s Point). To all who contacted their legislator in support of this initiative- THANK YOU!