First Time Home Buyer Savings Plan Coming to Virginia

First Time Home Buyer Savings Plan Coming to Virginia

First Time Home Buyer Savings Plan in VirginiaIf you have been hiding under a rock the past few weeks, you likely missed the news about how many first time home buyers are saddled with student loan debt thus making it almost impossible to save for a down payment for a home. This puts a nice ding in the real estate recovery as less buyers means slower growth. 

How The First Time Home Buyer Savings Plan Works

In an effort to help younger generations combat this barrier to entry into home ownership, the Commonwealth of Virginia will be rolling out a new First Time Home Buyer Savings Plan this Tuesday. The program, much like the 529 College Savings Plan, allows for up to $50,000 (growth is capped at $150,000) to be designated for the purchase of a first time single family residence. A single family residence is "defined by a single family residence owned and occupied by a qualified beneficiary, including a manufactured home, trailer, mobile home, condominium unit, or cooperative."

The funds, ear marked in the form of cash, investments, or insurance policies, are exempt from STATE taxes and if the money is withdrawn for any other purpose than to purchase a first time residence, one will be subject to back taxes and penalties. In addition, the program assumes the beneficiary will want to purchase a home in the Commonwealth of Virginia.

While the program is not perfect, it is a step in the right direction to reinforce the notion, and importance, of savings. The First Time Home Buyer Savings Plan also allows parents and grandparents to participate, making the hard to find gift a non-issue. I can only imagine the look on the faces of young adults when they are given a little leg-up on obtaining the American Dream!

Legislation on the First Time Home Buyer Savings Plan in Virginia

For more information and to read the legislation, please click here

Richmond VA Real Estate Agent

Ready to purchase now in the Richmond VA real estate market? Contact me, your Richmond VA real estate agent at the RVA Home Team with Jefferson Properties, to start your journey!

*Disclaimer* - The RVA Home Team, and anyone affiliated, is not a tax advisor, accountant, nor financial planner. For tax advice or financial planning, please consult your CPA, accountant, or financial advisor. Information is deemed reliable but not guaranteed. 

 

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