Iowans looking to purchase their first home will have extra help under legislation passed by the Iowa House. The bill would allow first time home buyers to set up a savings account to finance the purchase of a home and deduct a portion of this savings from their state income taxes.
In order to be eligible, a first time homebuyer must be a resident of Iowa and set up their account at a bank or credit union. While there is no limitation on the amount of contributions yearly, the first three thousand (or six thousand for joint filers) can be deducted from their yearly state income taxes. Deposits can be made for ten years following the opening of the account.
The money in the savings account can be used for closing costs and down payments. If the funds are withdrawn for any reason other than the purchase of the home all back taxes must be paid and a penalty is assessed.
The bill now moves to the Senate for further consideration.