The American Dream of homeownership just became a bit easier to achieve in Minnesota. Prompted by the Minnesota REALTORS and Housing First Minnesota, the Minnesota legislature this year adopted a new law authorizing the First-Time Homebuyer Savings Account. Start saving today and deduct 100 percent of your interest earned from your Minnesota taxes.
Details for the new law are:
• Parents or grandparents can set up an account and receive a deduction from their own state taxes.
• 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 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.
• The plan applies to first-time homebuyers and those re-entering the housing market if they have not owned a home within the past three years.
• Effective for taxable years beginning after Dec. 31, 2016.
The Minnesota REALTORS and Housing First Minnesota launched the Minnesota Homeownership Initiative designed to help builders produce safe, durable homes at a price people can afford in communities they love. The First-Time Homebuyer Savings Account was a key element of the initiative and was authored by Rep. Greg Davids (R.-Preston) and Sen. Karin Housley (R.-St. Mary’s Point).