FOR IMMEDIATE RELEASE: CONTACT: Iowa Association of REALTORS® 515-453-1064 info@iowarealtors.com, 5/25/17
Hard work pays off. The First Time Home Buyers Savings Program has been signed!
REALTORS® know that homeownership is the American dream. With the First Time Home Buyer Program, Iowans will be able to start saving and moving into a home of their own more quickly than in recent years.
Through a grant from the National Association of REALTORS®, we rallied Iowa REALTORS® and consumers to contact our legislature about the benefits of homeownership and the importance of the program. Ultimately, the First Time Home Buyer Program, Senate File 505, passed in the Senate with a vote of 49-11 and passed in the House with a vote of 87-11. Governor Branstad signed the bill Tuesday, May 9, 2017. It will go into effect January 1, 2018.
The Iowa Association of REALTORS® will be working with the Department of Revenue to implement the new program. A few key features of the program include:
● This bill allows individuals to open an interest-bearing savings account and designate the account as a first-time homebuyer savings account.
● The funds must be used to buy a property in Iowa.
● A first-time homebuyer is identified as an Iowa resident who has not owned a single-family residence for at least three years prior to the home purchase for which the account’s funds are applied.
● An individual may establish more than one account as long as each account has a different beneficiary.
● Parents and grandparents can start an account for a child or grandchild.
● There is no limit as to how much can be retained in each account.
● An account holder is allowed to deduct from the individual income tax the amount of contributions made during the year by the account holder to the account holder’s accounts, not to exceed $2,000 per year or $4,000 for married taxpayers with a joint account.
● The interest earned on the account is not taxable.
● The yearly tax deduction can be taken up to 10 times (a max of 10 years).
● This is a state tax deduction NOT a tax credit.
● It cannot be deducted on federal taxes.
● If the money is not used to buy an Iowa property, it may be subject to penalty.
The Iowa Association of Realtors® is the state’s largest real estate professional organization representing almost 7,000 members and affiliates. Anyone is eligible to become an IAR affiliate. For membership information, visit www.iowarealtors.com.