This bill creates a new tax-advantaged "down payment savings account" that allows first-time homebuyers to save money specifically for purchasing their first home. Eligible individuals can contribute up to $10,000 per year ($20,000 for joint filers) and deduct these contributions from their taxable income, provided they haven't owned a home in the previous three years and earn less than $150,000 annually ($236,000 for joint filers). Withdrawals used for down payments or closing costs on a primary residence are tax-free, though withdrawals for other purposes are subject to income tax plus a 20 percent penalty. The legislation is effective for tax years beginning after December 31, 2025, and contribution limits will automatically adjust annually for inflation.
Take Action
Your position
Add a comment
to comment on this bill.
Annotate the text
Highlight any passage on the Summary or Full Text tab to attach a note. Annotations appear on the Annotations tab.