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Mississippi is helping lead the way to home ownership after Gov. Phil Bryant signed HB 1601 into law.
The law establishes a First-Time Home Buyer Savings Account, allowing Mississippians to create monetary savings accounts for down payments or other home purchase related expenses.
PINNACLE Real Estate CEO & Co-Founder said this new federal law makes it easier to purchase a home in Mississippi. "With this law, more families will be able to afford the purchase of a home."
This is how it works: The law enables individual Mississippians to deduct up to $2,500 from state adjusted gross income annually, and couples filing jointly are able to deduct up to $5,000 annually from their state adjusted gross income. Interest earned on the account is also exempt from state gross income, and there is no cap on the amount that can be saved.
Eligible single-family homes includes newly-constructed homes, existing homes, manufactured homes, modular homes, mobile homes, condominium units or cooperatives.
The law is now in effect and is projected that about 380 new homes will be constructed in Mississippi to meet demand. It is also estimated that first-time homebuyer households will spend an additional $1,830 annually in their communities.
Buyers can open an account and start saving today and start taking a tax deduction beginning in the 2018 tax year.
When a buyer is ready to buy a single-family home, they will have money saved to help make the purchase. "Money deposited in the account is deductible from state income, which lowers their tax bill and interest earned on the deposits is also free from state income tax." Al added.