JEFFERSON CITY, Mo. — Missouri realtors are praising a new law designed to help first-time homebuyers by creating the new "First-Time Homebuyer Savings Account."
On Friday, July 13, Missouri Governor Mike Parson signed House Bill 1796, The First-Time Homebuyer Savings Account Act, into law.
Beginning in 2019, any person may open an account with a financial institution and designate that account as a first-time homebuyer savings account.
"The creation of this specialized savings account will better prepare first-time homebuyers by giving them financial advantage in the process of buying their first home," Missouri REALTORS® said of the law in a press release.
Individuals will be allowed to contribute $1,600 per year and $3,200 for couples filing jointly. The account maxes out at $30,000. Contributions will be 50-percent tax deductible for state income tax purposes. The deduction is capped at $800 per year for individuals and $1,600 per year for a married couple filing jointly.
Income resulting from assets in the first-time home buyer savings account will be exempt from state income tax.
The money in the account can be used for eligible expenses in the account-holder’s first-time home purchase; eligible expenses include a down payment and any closing costs associated with the real estate settlement. The primary residence purchased must be located in Missouri.
The new law defines a “first-time homebuyer” as someone who has never owned or purchased under contract for deed, either individually or jointly, a single-family, owner-occupied primary residence including, but not limited to, a condominium unit or a manufactured or mobile home that was assessed and titled as real property; or someone who, as the result of a dissolution of marriage, has not been listed on a property title for at least three consecutive years.
The First-Time Homebuyer Savings Account Act will go into law on January 1, 2019. Between now and January 1, 2019, the Missouri Department of Revenue will broadcast rules regarding the implementation of this program. Once rules are established, Missouri REALTORS® will prepare members and the public on how to best utilize the program.
Missouri Representative Becky Ruth of District 114 and Senator Caleb Rowden of District 19 were instrumental in moving this important legislation to the Governor’s desk.
Also signed into law was Senate Bill 581 which makes important changes in landlord and tenant law.