Mar 03, 2014
First-time homebuyer savings plans pass Senate, expected to become law
03 Mar 2014
Posted by Andrew Kantor
Our signature legislation for the 2014 session (which had passed the House of Delegates 99-0 on February 11), passed the Senate 39-1 and will go to Governor McAuliffe for his signature.
It was a close call after some members of the Senate tried to kill the First Time Homebuyer Savings Plans bill. VAR’s legislative advocacy staff put out an urgent call for action, and nearly 700 Virginia REALTORS® responded. Combined with some one-on-one visits and phone calls, our all-hands-on-deck effort made a huge difference in the outcome.
This means that starting July 1, Virginians will be able to put up to $50,000 in savings accounts, mutual funds, brokerage accounts, and any other investments as “first-time homebuyer savings plan accounts,” making the earnings on those accounts free of state taxes. The funds can be used for down payments and closing costs on first homes.
While the tax savings themselves may not be tremendous, the real value is in the existence of these accounts. They remind future homebuyers that they need to live a solid financial life before buying a home — they need to save.
Whether it’s a new parent or grandparent opening an account for a newborn, or a recent college grad looking a few years into the future, first-time homebuyer savings plans will reinforce the idea that it isn’t as easy to even get a loan anymore, and people need to prepare for the most important purchase of their lives. VAR is working to help prepare future homeowners for that responsibility.
In the coming weeks we’ll be talking more about these plans, how it helps Virginians, and how you can talk with clients, business people, and local leaders about their importance. Stay tuned.