Michigan’s first-time homebuyer savings program is for anyone!
In February of this year, the Governor signed into law a couple of public acts that created the first-time homebuyer savings program. This program allows anyone to open a “first-time home buyer” savings account with any bank or financial institution that is authorized to do business in Michigan.
Yes, we said anyone!
It does not have to be the first-time home buyer who opens the account, a parent, grandparent, or friend could start this account and name a first-time home buyer as the beneficiary on their taxes. This is a great way to help someone get into their first home!
And wait there is more, contributions to the first-time home buyer account are tax-deductible!
So, who is a first-time homebuyer you may ask? According to Michigan.gov: a first-time homebuyer is a Michigan resident who has not owned or purchased (individually or jointly) a single-family residence during a period of 3 years before the date of the purchase of a Michigan single-family residence.
That is a game-changer for anyone living in Michigan who may have recently gone through a divorce, or some unfortunate circumstance and has been working towards buying a home.
The other good news is that one person can start multiple accounts as long as they have named different first-time homebuyers as the beneficiary. As well as a first-time homebuyer can have multiple accounts that they are named the beneficiary on.
What a great way for parents or grandparents to give gifts, just add to the account!
These accounts can be used to pay for or reimburse eligible costs of purchasing a single-family residence that will be the principal residence of a qualified beneficiary. Those costs can include the down payment, closing costs, or other allowable costs that are shown on the settlement statement or the executed sales agreement for the purchase of a traditional or manufactured home.
Contributions to a first-time home buyer account during the tax year may qualify for a deduction from Michigan taxable income. There is a maximum account balance of $50,000.
Qualified withdrawals may not be made until one year after the first-time home buyer savings account is opened and designated as a first-time home buyer savings account. We are not accountants though, so please review this information with your accountant to properly set up an account.
Now is the time to open a new first-time home buyer savings account for yourself or someone you want to help! For the complete details go to Michigan.gov by clicking HERE!
We're April and Jean and we love helping people get into a home that fits their lifestyle. We call it "Right-Sizing", whether that is moving up to a bigger home or downsizing into something smaller. Let us know how we can help you make your real estate dreams come true.
2850 44th Street SE
Grand Rapids, MI 49512
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