Alabama’s First-Time Homebuyers Savings Account was renewed thanks to the continued efforts and diligence of the Alabama Association of Realtors.
What does this mean for first-time homebuyers?
Good news, of course! Since Alabama’s First-Time Homebuyers Savings Account was renewed, first-time and second-chance buyers can still deposit a certain amount of tax-free funds into a specific savings account.
First proposed in 2018, the program officially launched in Alabama in 2019. For a refresher on the initial program, read our previous blog on the topic here.
To summarize, the original initiative allowed first-time and second-chance buyers to save up to $5,000 in tax-free annual savings, or $10,000 for couples. The funds were then meant to be used within five years, specifically for down payments and closing costs.
Asking yourself what “second-chance buyer” means? To clarify, second-chance buyers are those returning to the housing market after not owning a home during the last 10 years.
Like most tax incentive and tax credit legislation in Alabama, it included a five-year sunset clause. Hence, the push for renewal. But the Alabama Association of Realtors didn’t stop there.
In fact, Alabama’s First-Time Homebuyers Savings Account was renewed, extended and improved.
What are the changes?
Under the renewed program, benefits will be extended, plus there will be more transparency and accountability.
Moving forward, terms have been extended from five to 10 years, giving homebuyers more time to save and more time to find the right home. Additionally, the Alabama Department of Revenue will now track and quantify two key steps.
First of all, they will monitor when accounts are opened. Next, they will note when the funds were actually used to purchase a home.
Summary
First-time buyers and second-chance buyers, head to your credit union or bank to find out more about establishing your First-Time Homebuyers Savings Account. Then reach out to Ryan Roberts to renew your search for a home in East Alabama! Keep reading our blogs for more industry news and local real estate highlights.
