If you are planning on buying a home in Idaho as a first time home buyer in 2022 or beyond, did you know you can potentially save money on your 2021 taxes?
Idaho has a unique program that was approved called the "First-Time Home Buyer Savings Account". If you are planning on buying your first home in Idaho, you would be foolish to not do this! Here is the link to HOUSE BILL NO. 589: https://legislature.idaho.gov/wp-content/uploads/sessioninfo/2020/legislation/H0589.pdf
Even though there are various ways to buy a home in Idaho with no money down (100 percent financing options still exist); you would typically still have various closing costs to pay. The more you plan to put down or anticipate in closing costs means the more you can save on your Idaho taxes if you plan ahead.
For example, if you plan on buying a $500,000 home and plan ahead, each individual tax-payer can put up to $15,000 into this special savings account ($30k for joint filers) for the eventual purchase of that home. That means joint filers can take money already in your other accounts planned for a home purchase and move it into this special savings account and deduct $30,000 from their income for 2021 for determining their Idaho income tax liability (before they buy the home)!
If you plan on closing the end of January of 2022, you can put another $30,000 into that account and save again reducing your taxable income by $60,000! You just can't withdraw the money in less than 30 days, so you have to plan ahead.
You can keep doing that up to a maximum of $100,000. If you planned on putting down 20% to avoid mortgage insurance, your entire down payment can be put into this account over the years as you save. The highest tax rate in Idaho is 6.5% so this would translate up to a $6,500 in tax savings on money you already planned to spend on a home!
Make sure to ask me about the Mortgage Credit Certificate as well! That will be covered in another blog.
If you are planning on buying a home in Idaho, feel free to contact me, Jim Paulson, for more details on this great program or on the 100 percent finance options I mentioned. We are blessed to have many First-Time Home Buyer programs available to use. I teach First-Time Home Buyer classes and would appreciate the opportunity to be your Realtor in 2022 or beyond!