02/10/2022
Here is some great news for those first time homebuyers thinking of eventually buying a home in the state of Michigan! More details will be coming in the next few weeks... note down below what criteria is used to be considered a "First Time Homebuyer" to be eligible for the program.
Late yesterday, Governor Whitmer signed House Bill 4290 (Rep. Manoogian (D), Birmingham) and Senate Bill 145 (Sen. Horn (R), Frankenmuth), creating the Michigan First-Time Homebuyer Savings Account Program. Now Public Acts 5 and 6 of 2022, these bills were signed with immediate effect.
“This new law sets up the state’s first dedicated savings vehicle for a new home purchase,” said James Iodice, 2022 Michigan Realtors® President. “These accounts will help individuals and families achieve the dream of homeownership, retain our talented college graduates, and promote financial literacy and smart savings. Realtors® are very excited to work as ambassadors for this new program. We are thankful to Governor Whitmer, as well as Representative Manoogian and Senator Horn for their leadership on this important issue.”
While many of you are familiar with the specifics of this new program, you and your clients will now be able to open first-time home buyer savings accounts to intelligently save for the purchase of a principal residence in Michigan. Account holders can deduct up to $5,000 for a single return or $10,000 for a joint return on their annual state income taxes for contributions into the account. Any associated interest accrued would also be exempt from state income tax, so long as it was used for a first-time home purchase. The definition of financial institution is very broad, including both interest bearing savings accounts and brokerage accounts, providing account holders with the necessary freedom to find the savings vehicle that is right for them. The definition of a first-time home buyer is also very important. “First-time home buyer” means an individual who is a resident of this state and has not owned or purchased, either individually or jointly, a single-family residence during a period of 3 years prior to the date of the purchase of a single-family residence.
Michigan Realtors® is excited to take the next step in promoting this important new program to the public. Be on the lookout in the coming weeks for the launch of the first of many engagement campaigns to raise awareness of the Michigan First-Time Home Buyers Savings Account Program.
