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720-482-3000
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COLORADO FIRST TIME HOME BUYER,
6465 GREENWOOD PLAZA BLVD., SUITE 100, CENTENNIAL, CO 80111
A First-time Homebuyer Savings Account allows any Coloradan to set aside up to $50,000 toward the costs of closing on a new home. The earnings on those funds - interest and capital gains - are free from Colorado state taxes forever.
These accounts are simple and easy to set up. Not only can you open a new one, you can also designate almost any existing account as an FHSA. To create an FHSA, you simply include a form when you file your state taxes. (It will indicate that you should not be taxed on any earnings - e.g., interest or capital gains - because of the account's FHSA status.)
After you use the money toward the closing costs on a first home (yours or someone else's - see below), you send in a different form to the Department of Revenue showing that the funds were put toward an "eligible cost."?
Q: What kinds of accounts can be CFHSAS?
A: Almost any account you have with a financial institution: mutual funds, CSd, brokerage (stocks, bonds, etc.), money markets, insurance, even a savings account, CFHSAs can also include individual stocks.
Q: How much can I put in a CFHSA account?
A: You can contribute up to a total of $50,000 in principal, and the account can grow in value up to $150,000. There will be an annual contribution cap of $14,000 ($28,000 if filing jointly). There is no limit on how long the account can exist.
Q: What can I use the money for?
A: A CFHSA account can be used to pay for just about anything related to closing a home (anything included on the settlement statement: closing costs, inspections, lender fees, etc.) These are all considered eligible costs.
Q: What is considered a first-time home buyer?
A: A first-time buyer is: Someone who has never purchased a home before. That includes single-family homes, condos, co-ops, townhouses, or mobile homes. (It does not include land or commercial property.) If you owned a home at some point but did not purchase one (e.g., if you inherited) you can still qualify. It also includes someone divorced who may previously have owned a home with their spouse.
Q: Can I use the money to pay for someone else's closing costs?
A: Yes. As long as the person you're giving the money to (e.g., child, grandchild, niece, and even a close friend) is a first-time homebuyer
Can I use my CFHSA funds if I'm buying a home with someone who is not a first-time buyer?
A: Yes, as long as you qualify as a first-time buyer.
