What is the Michigan First-Time Home Buyers Savings Account all about?
Earlier this year, a bill was introduced to create the Michigan First-Time Home Buyers Savings Account (FTHBSA) program. It is supposed to be used as a smart savings tool to support home ownership in Michigan. The account could be opened in one of two ways, either jointly or individually, in the name of a first-time home buyer beneficiary. Joint account holders would have to file a joint return.
Use of the account would be self-directed by the holder of the account, meaning financial institutions aren’t required to manage or report based on the accounts title as a first-time home buyer account.
The account would provide up to 20 years of investment deductibility from an account holder's state income tax. This allows the interest on the account to grow tax-free!
The annual deductible threshold is held up to $5,000 for a single tax return and $10,000 for a joint filing.
Who can contribute?
People other than the account holder(s) can make contributions to the account, as long as it doesn’t exceed the $50,000 contribution cap. The only types of contributions that can be made are cash and marketable securities.
What if I already owned a home before and lost it in the last crash?
To take advantage of either of these options, this doesn’t technically have to be your “first” time owning a home. Instead, the state defines a first-time homebuyer as someone who has not owned a home in the last three years.
Beginning January 2022, those who wish to do so, may open a First-Time Home Buyer Savings Account.
Michigan Realtors® is confident that FTHBSA will not only boost homeownership in Michigan, but it will play a very important role for talent retention within the state as well.
Thinking about buying your first home? A conversation with an excellent Realtor is a great starting point. Contact Kristy today to arrange a meeting with Santiago; kristyh@santiagoproperties.us In addition MSHDA has some excellent first time home buyer information here.