Alabama First-Time and Second Chance Home Buyer Savings Account
Open a tax-free savings account to save towards purchasing your first home - a resource exclusively for Alabama's first-time or second-chance homebuyers who haven't owned or purchased a home in ten years.
Details
- A first-time and second-chance home buyer savings account is established by opening a separate savings account at a financial institution for the sole purpose of holding funds for a down payment and closing costs for the purchase of a first home in Alabama.
- The account must be labeled "first-time and second-chance home buyer savings" in the name of the account holder(s) shown in the financial institution's records or in their own written documentation.
- There is no limit to the annual amount of deposits. There are, however, limitations on income tax deductions from the deposits. Income tax deductions for individuals are limited to $5,000 per year for a total of $25,000 over ten years, and joint savings account holders who file taxes jointly can deduct up to $10,000 per year for a total of $50,000 over ten years.
- The First-time and Second-Chance Homebuyer Act was effective January 1, 2019. An individual must open a first-time/second-chance homebuyer savings account between January 1, 2019 and December 31, 2028.