By: Brandt Tingen August 24, 2014
A lot of folks who’d like to buy their first home, or help a friend or family member buy their first home, first have to contend with the overwhelming hurdle of bringing all that money to the closing table. Between down payments, closing costs, home warranties, home inspections…. the list can, and does, go on and on. Now, thanks to legislation passed in Virginia, any Virginian can designate an account as a First-time Home Buyer Savings Plan (FHSP). This allows Virginians to shield up to $50,000 in principal (and up to $150,000 in principal, interest, and capital gains) from state taxes. Virginians can then apply these funds towards any costs related to closing.
One of the greatest aspects of the FHSP is it’s flexibility. Almost any account can be designated as a FHSP: mutual funds, CDs, brokerage, money market, insurance, savings account, etc., etc. There is no limit on how long accounts can exist. Designating an account as an FHSP and applying the funds towards closing is as simple as sending in a form with your taxes to designate an account, and sending in a form after the real estate transaction has closed.
For more detailed information, a video explaining the FHSP, and a guideline for legislative delivery, follow the links below:
Thanks Virginia! We all could use a little (tax) Break!!
A little bit about the Author:
Brandt Tingen is a Virginia and DC Area Real Estate Professional, Realtor, Investor, Team-Leader, Entrepreneur, Virginia Wine Lover, and Runner who loves to share his knowledge of the local real estate markets with clients and partners in the area. Reach him directly on (703) 674-6777 or Brandt.Tingen@kw.com with any of your burning real estate questions, or DMV area scuttlebutt!!
Disclaimer: The views and interpreted information contained in this article are solely those of the author and not intended to be professional Legal, Financial, and/or Tax advice.