Did you know ?
this legislation went into effect in 2018
WHAT IS THE IOWA FIRST-TIME HOMEBUYER PROGRAM?
This bill allows individuals to open an interest-bearing first-time homebuyers savings account with a state or federally chartered bank, savings and loan association, credit union or trust company in Iowa and designate the account as a first-time homebuyer savings account. The funds must be used to buy a property in Iowa.
A first-time homebuyer is identified as an Iowa resident who has not owned a single-family residence for at least three years prior to the home purchase for which the account’s funds are applied.
THE FIRST-TIME HOMEBUYER SAVINGS ACCOUNT
An individual may establish more than one first-time homebuyers savings account as long as each account has a different beneficiary. This means that parents and grandparents can start an account for a child or grandchild!
There is no limit as to how much can be retained in each account. However, an account holder is allowed to deduct from the individual income tax the amount of contributions made during the year by the account holder to to the account holder’s accounts, not to exceed $2,000 per year or $4,000 for married taxpayers with a joint account. The interest earned on the account is not taxable and the yearly tax deduction can be taken up to 10 times (a max of 10 years).
As a reminder, this is a state tax deduction NOT a tax credit and it cannot be deducted on federal taxes. If the money is not used to buy an Iowa property, it may be subject to penalty. We will continue updating you as we find out more of the details; in the meantime, read the full legislation.
Check with local banks for participation !
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