On Tuesday, Governor Mark Dayton signed HF 1, the Omnibus Tax Bill, into law. Included in this was a provision for the creation of the First-Time Homebuyer Savings Account. This was the leading proposal of BATC’s and Minnesota REALTOR’s Homeownership Initiative.
The Law Does the Following:
- Individuals can deposit money annually into a FDIC-insured savings account.
- The account can be opened at any Minnesota bank or credit union.
- Contributions to the account would receive a state tax deduction on interest earned. Individuals can deposit up to $14,000 annually while married joint filers can deposit up to $28,000 per year.
- Parents or grandparents could set up an account AND receive a deduction from their own state taxes.
- The plan applies to first time homebuyers and those re-entering the housing market, if they have not owned a home within three years.
- Effective for taxable years beginning after December 31, 2016.