State Plan Helps First-Time Homebuyers
Up To $50K Can Be Set Aside Tax-Free
HARRISONBURG — A new law that took effect this month is designed to make first-time home-buying an attainable goal for more Virginians.
The First-Time Homebuyers Savings Plan allows residents to avoid state taxes on contributions to a fund that will be used to purchase a home, as well as earn investment income free of taxes to buy a home.
Up to $50,000 principal can be set aside tax-free in a bank account, credit union, mutual fund or other financial product.
The law limits the amount that can be retained in the account to $150,000, including principal and investment.
“This law is part of a legislative package we’ve been working on for two years that was finally pushed through and signed into law this year,” said Kemper Funk-
houser, a broker and chief operating officer of the Harrisonburg-based Funkhouser Real Estate Group.
Funkhouser sits on the board of directors of the Virginia Association of Realtors and has worked closely on the legislation.
“This is a step in the right direction, and we believe that for most people, buying their own home is a good investment,” he said. “This law is a great way to help them achieve that.”
Any account at a financial institution can be used under the homebuyer savings plan and stock purchases also qualify.
“We worked with the legislature to get this pushed through into law because we wanted to build the culture of saving when it comes to buying a home,” said Stacey Ricks, chief of marketing and communications for the Virginia Association of Realtors. “Home ownership is a big responsibility, and this law helps reinforce how important it is to save for it.”
Anyone who has never purchased a single-family home, condo, townhouse or mobile home is eligible for the program. Money in the tax-free account can be used only for a down payment and closing costs.
Ricks said the association is now working to educate real estate agents across the commonwealth on how to help their clients plan for homeownership.
“It’s new, so it’s going to take a little time to get everyone educated and familiar with the law, but it’s going to be great thing for the Realtors and their clients,” she said.
For more information about the First-Time Homebuyers Savings Plan, call the Virginia Association of Realtors at 804-264-5033 or www.varealtor.com
Contact Megan Applegate at 574-6286 or firstname.lastname@example.org