119th (2025–2027)
H.R. 8709
The Homeownership Savings Act creates a new tax-advantaged savings account designed to help first-time homebuyers accumulate funds for down payments and closing costs on their primary residence. Account holders can deduct up to $2,000 to $3,000 annually (depending on filing status) with a lifetime contribution limit of $40,000, and withdrawals for qualified homeownership expenses are completely tax-free. The accounts must be established with banks or qualified trustees and automatically terminate within 60 days after the beneficiary purchases their first home; non-qualified withdrawals face income tax plus a 20% penalty, though exceptions exist for death or disability. The bill also allows employers to contribute to these accounts on behalf of employees with favorable tax treatment, requires annual cost-of-living adjustments to contribution limits, and mandates trustee reporting to the IRS and account holders. These provisions take effect for tax years beginning after December 31, 2026.