Minnesota Introduces First Time Homebuyers Savings Accounts

By Anthony SanFilippo
August 2017

First-time homebuyer

The Minnesota legislature recently passed a new law that included the First-Time Homebuyer Savings Account Act, which now allows individuals or couples to save the money they need in a tax-preferred savings account to go toward the purchase of a home.

With this new law, it just got easier for Minnesotans to start saving for their first home.

Not only is it easier to save for a down payment on a first home, contributions will also help cover additional closing costs, taxes and fees associated with buying a home.

Because now you can save the money you need for such an important life investment in a tax preferred savings account where the interest and dividends from those funds can be claimed as a state tax deduction.

It’s an initiative to incentivize homeownership, which is the backbone of safe neighborhoods, healthy schools, a consistent labor force and stronger communities, especially here in Minnesota.

In a recovering housing market in the wake of the worst recession in 70 years, a variety of strategies are needed to support and encourage homeownership. Creating this savings account is a great first step.

Minnesota residents can now open a dedicated savings account for the purchase of a first home regardless of income.Click To Tweet

Here’s five things you need to know about the First-Time Homebuyer Savings Account Act:

  • Individuals or couples can establish a dedicated savings account at their local bank or credit union for the purchase of a first home in Minnesota regardless of their income.
  • Parents or grandparents can open an account for their children or grandchildren and contribute to those accounts as well.
  • Account holders can save up to $150,000 total with interest and dividends. Maximum contributions are set for married joint filers at $100,000 and all other filers at $50,000.
  • Annual contributions are capped at $28,000 for married joint filers and $14,000 for all other filers.
  • All interest and dividends earned on this account can be claimed as a state income tax deduction.

Contact a Minnesota REALTOR® to learn more.


Related Stories


Make sure Congress knows that you support programs that support property owners. Go to the American Property Owners Alliance now and make your voice heard by signing the petition.

Go There Now