Mississippi becomes 4th State to Create Tax Benefits for First-Time Homebuyer Savings
“It’s nice for Mississippi to be a positive example for other states to emulate!” laughs Clarke Wise, Governmental Affairs Director of the Mississippi REALTORS®. He’s referring to the fact that his state is among the first few in the nation to enact legislation establishing a First-Time Home Buyer Savings Account program, thanks to extensive support from the Mississippi REALTORS® and the National Association of REALTORS®.
Individuals in Mississippi can now create monetary savings accounts for down payments or other expenses related to the purchase of a first home, and will be able to deduct $2,500 from state adjusted gross income annually; couples filing jointly can deduct up to $5,000. Interest earned on the account is also exempt from state income tax and there is no cap on the amount that can be saved.
The Mississippi REALTORS® had been behind this legislation for years. Governor Phil Bryant was behind it, too. But, as Wise explains, the state had experienced a few years of low revenue collections, and when legislators see a tax cut, they're inclined to say 'no.' What they needed to see was hard research showing what the effect of the proposed savings account policy would be. "NAR is a wealth of resources!" says Wise. "We reached out to all our local associations for home sales data from the past five years and turned it over to NAR's Campaign Services team. They made it the basis of a 52-page report that indicated a clear economic benefit for the state of Mississippi, amounting to 379 new homes constructed to meet demand and an estimated additional $1,830 spent by new homebuyers in their communities, annually." He was amazed by the depth of detail in the report, which drilled down to reveal how those additional expenditures would benefit various sectors as new homeowners bought housekeeping supplies, furnishings, new pet supplies, etc.
David Griffith, Mississippi REALTORS®' 2017 President, notes that it was NAR's research that got his association's foot in the door, so to speak. "Normally, a representative or senator will begin to gloss-over at the words 'first-time-homebuyer,' but these economic projections really got their attention and enabled Clarke to go deeper, and explain how this policy would actually raise property values and tax revenue, and create more stable and prosperous communities in the long run. The report allowed us to game-change."
NAR also provided campaign services, bill drafting, economic research and a timely Call for Action to help the Mississippi REALTORS® make its case among the legislators. Wise credits the Mississippi REALTORS® with giving him the freedom to get out of the office and personally visit over two dozen legislators in their home districts over the summer to start getting them on board. He also spent time on coalition and consensus building: the Home Builders, Manufactured Housing, and Bankers Associations were all strong partners.
The bill passed unanimously in the House of Representatives and by a vote of 51-to-one in the Senate. Governor Bryant signed it into law with warm thanks to everyone who worked so hard to make it happen.
"Getting key people on board in advance of the session, back during the summer, gave us a great kick-start," notes Griffith. The other big advantage, he says, was the powerful network of grassroots and issues mobilization volunteers among local REALTOR® organizations across the state. "All those hard-working committee members and their contacts really got the message out. Those relationships will continue to be important as we progress to the next step, which is to educate the public about this great new benefit to homebuyers."
That public awareness campaign is already in development. Local boards have been calling, says Wise, looking to equip their members to help get clients started. But before charging ahead, the Mississippi REALTORS® paused to give thanks to the representatives and senators who supported the First-Time Homebuyer Savings Account legislation. "Legislators always hear from people who have a complaint, or who want something. When this bill was passed, we made sure they all heard a great big 'Thank you!' from 6,000 REALTORS®," says Wise.
To learn more about how Mississippi REALTORS® led the way for a savings program to help future homebuyers in their state, contact MAR Governmental Affairs Director Clarke R. Wise at 601-932-5241 ext. 28 or MAR 2017 President David Griffith.
Clarke Wise, Governmental Affairs Director of the Mississippi REALTORS® [3rd from right] and 2017 Mississippi REALTORS® President David Griffith, [5th from left], both quoted in story.
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