H.R. 2748 increases the amount first-time homebuyers can withdraw from their individual retirement accounts (IRAs) without penalty from $10,000 to $25,000. This change affects first-time homebuyers who want to tap their retirement savings to help with down payments or closing costs on their first home purchase. The bill also includes an inflation adjustment mechanism that will automatically increase the $25,000 limit starting in 2027 to account for rising costs of living, with adjustments rounded to the nearest $100. The legislation has no direct federal spending but reduces tax revenue by allowing larger tax-free withdrawals. The changes take effect for distributions made after December 31, 2025.
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