Legal Analysts

Thursday, June 22, 2017

New York State First Home Savings Program Passes Both Houses

A new tax incentive is almost available for purchasing your first home. Legislation has passed both the NYS Senate and Assembly (it is returned to the Assembly before going to the Governor).

The program will work for the purchase or construction of a home, townhome, condominium or unit in a cooperative housing corporation.

Under the account, up to $100,000.00, exclusive of gain, can be invested and withdrawn without state personal income tax if the money is used for purchasing or constructing a first home purchase.

Better yet, parents can create these accounts for their children, where a child would be called a “designated beneficiary” under the statute.

However, to constitute a first time home buyer, whether as a designated beneficiary or on one’s own account, an individual cannot have had any prior “ownership interest in a principal residence at any time” both in the “United States or abroad.”  To clarify, an individual does not have an ownership interest if they expect to inherit property or even if they own the remainder interest under a trust.
If the first time purchaser qualifies there is a requirement to utilize the home as a primary residence for “not less than two years after purchase.”

Stay tuned as the legislation makes its way to the governor's desk and then, parents can start saving for their children's first home like they do on a 529 Plan for college.