Down Payment – Home Buyer Savings
Do you know somebody saving for a home down payment? Here’s five things you need to know about the 2017 First-Time Homebuyer Savings Account Act:
Individuals or couples can establish a dedicated savings account at their local bank or credit union for the purchase of a first home in Minnesota regardless of their income.
Parents or grandparents can open an account for their children or grandchildren and contribute to those accounts as well.
Account holders can save up to $150,000 total with interest and dividends. Maximum contributions are set for married joint filers at $100,000 and all other filers at $50,000.
Annual contributions are capped at $28,000 for married joint filers and $14,000 for all other filers.
All interest and dividends earned on this account can be claimed as a state income tax deduction.
During the 2020 session, Minnesota Realtors® supports expanding the reach and effectiveness of the 2017 law by:
Allowing contributions to be claimed as a deduction from state taxes (as originally proposed in the 2017 bill)
Creating a tax incentive for employers to voluntarily contribute to employees’ first-time home buyer savings accounts
Buyers might also want to read: