The First-Time Homebuyer Savings Act of 2026 creates a new tax-advantaged savings account designed to help first-time homebuyers accumulate funds for home purchases or construction. Eligible individuals can contribute up to $10,000 per year to these accounts and receive a tax deduction, with income limits of $200,000 for single filers and $400,000 for joint filers. Money withdrawn from the account to pay qualified homebuyer expenses—including down payments, closing costs, land purchases, and construction expenses—is tax-free, though non-qualified withdrawals are subject to income taxes plus a 10 percent penalty. The bill also allows account holders to transfer remaining funds to a traditional individual retirement account within 180 days of acquiring their home. The legislation applies to individuals who have not owned a home in the three years prior to opening the account and becomes effective for tax years beginning after the bill's enactment.
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