Owning your own home has been a cornerstone of the modern American dream, and remains the surest path to building wealth for American families. There are plenty of pundits ready to explain how home equity grows over time, but the bottom line is that when you rent your dollars go one way – out. When you own, your monthly mortgage payment is likely about the same as rent, but over time you’ll see a growing profit when you’re ready to sell. According to the Federal Reserve’s Survey of Consumer Finances, the typical net worth of homeowners is close to $200,000, while a typical renters’ net worth is under $5,500.
Saving for a Down Payment Just Got Easier…
First-Time Homebuyer Savings Account signed into law in Minnesota
The American dream of homeownership just became a bit easier to achieve in Minnesota. Prompted by Housing First Minnesota and the Minnesota REALTORS®, the Minnesota legislature 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 three years.
- Effective for taxable years beginning after December 31, 2016.
Housing First Minnesota and the Minnesota REALTORS® 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 home buyers savings account was a key element of the initiative and was authored by Rep. Greg Davids (Preston) and Sen. Karin Housley (St. Mary’s Point).