H.R. 8221

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8221 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8221

To amend the Internal Revenue Code of 1986 to establish first-time 
homebuyer savings accounts.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 9, 2026

Ms. Mace introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to establish first-time 
homebuyer savings accounts.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``First-Time Homebuyer Savings Act of 
2026''.

SEC. 2. FIRST-TIME HOMEBUYER SAVINGS ACCOUNT.

(a) In General.--Part VII of subchapter B of chapter 1 of subtitle 
A of the Internal Revenue Code of 1986 is amended by inserting after 
section 225 the following new section:

``SEC. 225A. FIRST-TIME HOMEBUYER SAVINGS ACCOUNT.

``(a) Deduction Allowed.--In the case of an eligible individual, 
there shall be allowed as a deduction for the taxable year an amount 
equal to the aggregate amount paid in cash during such taxable year by 
or on behalf of such individual to a first-time homebuyer savings 
account of such individual.
``(b) Definitions.--For purposes of this section--
``(1) First-time homebuyer savings account.--The term 
`first-time homebuyer savings account' means a trust created or 
organized in the United States as a first-time homebuyer 
savings account exclusively for the purpose of paying qualified 
homebuyer expenses of the account beneficiary, but only if the 
written governing instrument creating the trust meets the 
following requirements:
``(A) No contribution will be accepted--
``(i) unless it is in cash, or
``(ii) if such contribution would result in 
aggregate contributions to such account in 
excess of the contribution limit specified in 
subsection (c).
``(B) The trustee is a bank (as defined in section 
408(n)), an insurance company (as defined in section 
816), or another person who demonstrates to the 
satisfaction of the Secretary that the manner in which 
such person will administer the trust will be 
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested 
in life insurance contracts.
``(D) The assets of the trust will not be 
commingled with other property except in a common trust 
fund or common investment fund.
``(E) The interest of an individual in the balance 
in his account is nonforfeitable.
``(2) Eligible individual.--The term `eligible individual' 
means an individual if such individual (and, if married, such 
individual's spouse) had no present ownership interest in a 
residential property during the 3-year period ending on the 
present date.
``(3) Qualified homebuyer expenses.--For purposes of this 
section, the term `qualified homebuyer expenses' means amounts 
paid or incurred by the account beneficiary--
``(A) in the case of an eligible individual, to 
purchase a principal residence, including any 
transaction costs relating to such purchase,
``(B) in the case of an eligible individual, to 
construct a principal residence, including purchasing 
land, site preparation, design costs, permitting costs, 
and other expenses incurred to carry out such 
construction, and
``(C) for any expense relating to a principal 
residence of the account beneficiary acquired or 
constructed when such account beneficiary was an 
eligible individual during the 3-year period beginning 
on the date--
``(i) of the acquisition of such principal 
residence, or
``(ii) in the case of a principal residence 
constructed by the taxpayer, the date on which 
such construction was completed.
``(4) Account beneficiary.--The term `account beneficiary' 
means the individual on whose behalf the first-time homebuyer 
savings account was established.
``(5) Principal residence.--The term `principle residence' 
has the same meaning as when used in section 121.
``(6) Publication of national average single family home 
price.--The Secretary of the Treasury shall, not later than 
December 31 of each calendar year, publish the estimated 
national average price of a single family home for the 
following calendar year.
``(7) Rollover contribution.--The term `rollover 
contribution' means an amount paid or distributed from a first-
time homebuyer savings account to the account beneficiary to 
the extent that--
``(A) the amount received is paid into a first-time 
homebuyer savings account for the benefit of such 
beneficiary not later than the 60th day after the day 
on which the beneficiary receives the payment or 
distribution, and
``(B) such account beneficiary did not receive any 
other amount described in subparagraph (A) from a 
first-time homebuyer savings account which was not 
includible in the individual's gross income because of 
subsection (d)(2)(B) during the 1-year period ending on 
the date of such receipt.
``(c) Contribution Limit.--The aggregate amount of contributions 
for any calendar year to all first-time homebuyer savings accounts 
maintained for the benefit of an individual shall not exceed $10,000.
``(d) Limitation on Modified Adjusted Gross Income.--In the case of 
a taxpayer whose adjusted gross income for the taxable year exceeds 
$200,000 (twice such amount in the case of a joint return), no 
deduction shall be allowed under subsection (a) for such taxable year.
``(e) Treatment of Distributions.--
``(1) Amounts used for qualified homebuyer expenses.--Any 
amount paid or distributed out of a first-time homebuyer 
savings account which is used exclusively to pay qualified 
homebuyer expenses shall not be includible in gross income.
``(2) Inclusion of amounts not used for qualified homebuyer 
expenses.--Any amount paid or distributed out of a first-time 
homebuyer savings account which is not--
``(A) used exclusively to pay the qualified 
homebuyer expenses of the account beneficiary,
``(B) a rollover contribution, or
``(C) a transfer made under subsection (g),
shall be included in the gross income of such beneficiary and 
the amount of any tax imposed by this chapter shall be 
increased by 10 percent on any amount so includible.
``(3) Excess contributions returns before due date of 
return.--
``(A) In general.--If any excess contribution is 
contributed for a taxable year to any first-time 
homebuyer savings account of an individual, paragraph 
(2) shall not apply to distributions from the first-
time homebuyer savings accounts of such individual (to 
the extent such distributions do not exceed the 
aggregate excess contributions to all such accounts of 
such individual for such year) if--
``(i) such distribution is received by the 
individual on or before the last day prescribed 
by law (including extensions of time) for 
filing such individual's return for such 
taxable year, and
``(ii) such distribution is accompanied by 
the amount of net income attributable to such 
excess contribution.
Any net income described in clause (ii) shall be 
included in the gross income of the individual for the 
taxable year in which it is received.
``(B) Excess contribution defined.--For purposes of 
subparagraph (A), the term `excess contribution' means 
any contribution (other than a rollover contribution) 
which is not excludable from gross income under this 
section.
``(f) Tax Treatment of Account.--A first-time homebuyer savings 
account is exempt from taxation under this subtitle unless such account 
has ceased to be a first-time homebuyer savings account. 
Notwithstanding the preceding sentence, any such account is subject to 
the taxes imposed by section 511 (relating to imposition of tax on 
unrelated business income of charitable, etc. organizations).
``(g) Treatment of Account After Acquisition of Residential 
Property.--
``(1) In general.--In the case of an account beneficiary 
who acquires (or whose spouse acquires) a present ownership 
interest in a residential property such individual may transfer 
amounts in the first-time homebuyer savings account of such 
individual or such individual's spouse to an individual 
retirement account (as defined in section 408(a)) of such 
individual or such individual's spouse during the 180 day 
period beginning on the date on which the 3-year period 
described in subsection (b)(3)(C) ends with respect to such 
acquisition.
``(2) Termination.--A first-time homebuyer savings account 
shall cease to be a first-time homebuyer savings account on the 
first day after the 180 day period described in paragraph (1) 
and amounts in such account shall be treated as distributed to 
the account beneficiary.''.
(b) Payment to First-Time Homebuyer Savings Account Not Treated as 
Wages.--Section 3121(a) of such Code is amended--
(1) in paragraph (22)(B), by striking ``; or'' and 
inserting a comma,
(2) in paragraph (23), by striking ``section section 
139B(a).'' and inserting ``section 139B(a), or'', and
(3) by inserting after paragraph (23) the following new 
paragraph:
``(24) any amount which is excludible from gross income of 
the employee under section 225A(a).''.
(c) Tax on Excess Contributions.--
(1) In general.--Section 4973(a) of such Code is amended--
(A) in paragraph (5), by striking ``or'',
(B) in paragraph (6), by inserting ``or'' after the 
comma, and
(C) by inserting after paragraph (6) the following 
new paragraph:
``(7) a first-time homebuyer savings account (within the 
meaning of section 225A(b)(1)),''.
(2) Definition of excess contribution in 4973.--Section 
4973 of such Code is amended by adding at the end the following 
new subsection:
``(i) Excess Contributions to First-Time Homebuyer Savings 
Account.--For purposes of this section, in the case of a first-time 
homebuyer savings account (within the meaning of section 225A(b)(1)), 
the term `excess contribution' means the amount by which the amount 
contributed for the taxable year to such account exceeds the 
contribution limit under 225A(c)(1).''.
(d) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of subtitle A of such Code is amended by 
inserting after the item relating to section 225 the following new 
item:

``Sec. 225A. First-time homebuyer savings account.''.
(e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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