First-Time Homebuyer
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First-Time Homebuyer Savings Account
Our main goal is helping customers achieve their financial goals, and homeownership is often chief among those goals. In 2017, Iowa Legislature passed a law that created a new income tax credit for first-time homebuyers. The tax credit can be accessed through the use of a homebuyer savings account, which can be set up and maintained at Boone Bank & Trust Co. To qualify for the tax deduction, the homebuyer must be a first-time homeowner who has not previously owned – either individually or jointly – a single or multifamily residence in the previous three years. Here's how it works:
- Open a Boone Bank & Trust Co. Savings Account. The account must be labeled as a First-Time Homebuyers savings account
- You can make unlimited deposits each year to the homebuyer savings account
- The income tax deduction is limited to $2,000 per year when filing individually and $4,000 per year when filing jointly
- Interest earned on account balances is exempt from state income tax
- Accounts can be opened in another person’s name. For example, a parent could open an account and contribute to it as a gift to a child. As long as the funds are used toward the purchase of a first home, it will qualify for the tax deduction
- The maximum amount that qualifies for the exemption will be adjusted annually for inflation
- The money within an account is available for up to 10 years to be used for the qualifying purchase costs of a single-family residence