Iowa Legislature Established First Time Home Buyer Savings Accounts
The Iowa Legislature Established First Time Home Buyer Savings Accounts during the 2017 Legislative Session. The Governor signed the bill into law in late April, which will allow individuals and couples, who file their taxes on a joint return, to create a "First Time Home Buyer Savings Account" for the purpose of purchasing a home.
Individuals and Couples will be allowed to establish a first time home buyers savings account beginning in 2018. Individuals can add $2,000 per year and Couples, filing jointly, will be able to add $4,000 per year to their account. In addition, the new legislation allows others, such as family members, to add to the savings account.
The money that is added to the first time home buyer's savings account will be tax deductible, with certain restrictions, during the year that it was deposited.
The savings account can be used at a date in the future to pay for expenses of purchasing a home for the first time. Those expenses include down payments, closing costs, legal fees, etc. Money that is withdrawn and not used for the purpose of purchasing a home will then be taxed as income. The best resource for information will be a tax preparer or local bank, once the final regulations are posted.
Terry Pauling is a Broker & REALTOR® at EXIT Realty North Star, 222 W Salem Ave. Indianola, IA 50125. We provide full-service real estate services to the Indianola, Warren County and Des Moines, Iowa metro areas. Find Links and contact information for Terry at www.exititown.com. (C) 515-249-9192
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