On Tuesday, April 21 the Iowa Association of REALTORS issued an important Call for Action to all members regarding first time home buyer savings account legislation. Members who have not yet acted can do so here in under one minute.
REALTOR® members support of Senate File 414 and House File 631, the first time home buyer savings account legislation. This legislation will help potential home buyers in our state save the money needed to afford the purchase of their first home.
Senate File 414 and House File 631:
- Establishes a first time home buyer savings account program in Iowa.
- A first time home buyer will be able to receive an income tax exemption for savings up to $3,000/year for up to 10 years for a potential total of $30,000 at the end of the 10th year, or $6,000/year for two first time home buyers who file taxes jointly for a total of $60,000 at the end of 10 years.
- Withdrawals from the account are tax-free, as long as the funds are used for closing costs and down payment on a single family, owner occupied residence in Iowa.
- The first time home buyer is required to set up an account with an Iowa bank or credit union to be used to purchase a home in Iowa.
- Income tax and a 10% withdrawal penalty would apply for withdrawal of monies if not used for the purchase of a home in Iowa.
- This legislation is a significant step in helping Iowa’s first time home buyers save for the cost of achieving the dream of home ownership.
Why Home Ownership Matters
- Home owners vote, volunteer and contribute more to their neighborhoods.
- Every home purchase pumps up to $50,000 in the economy over time.
- Home ownership supports and creates American Jobs. For every two homes sold, one job is created.
- Housing is a key driver of our state economy.
- The stability that home owners provide reduces crime and supports neighborhoods upkeep.
Iowa REALTORS® addressed this issue during our Legislative Bus-In Day in February.