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119-hr-8221119th CongressWALLET

First-Time Homebuyer Savings Act of 2026

Sponsored By: Representative Mace, Nancy [R-SC-1]

Introduced

Summary

This bill would create a tax-advantaged First-Time Homebuyer Savings Account (FTHSA) to let people save specifically for a first home by allowing a new deduction for cash contributions and tax-free withdrawals for qualified purchase and construction costs.

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  • First-time homebuyers and families would gain a dedicated savings vehicle that covers buying or building a principal residence, including land, site work, design, permitting, construction costs, and transaction fees. Accounts must be held by a qualified trustee and the beneficiary must have had no ownership interest in a residence during the prior 3 years.
  • Income-limited savers face eligibility caps. The deduction phases out above $200,000 in modified adjusted gross income and above $400,000 for joint filers, and annual contributions across all FTHSAs are capped at $10,000 per individual.
  • Savers who become owners get a transition option. After the three-year qualifying period, remaining funds can be moved into an IRA within 180 days under the bill's post-acquisition transfer rules, and nonqualified distributions are taxable and subject to a 10% additional tax unless rolled over.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

New first-time homebuyer account

If enacted, the bill would create a First-Time Homebuyer Savings Account for people who (and whose spouse) did not own a home in the prior three years. You would be able to deduct cash contributions to the account up to $10,000 per year, but taxpayers with MAGI over $200,000 ($400,000 joint) could not take the deduction. Money withdrawn to buy or build your main home would be tax-free. Nonqualified withdrawals would be taxed and generally face a 10% additional tax, and putting more than $10,000 in one year could trigger an excise tax. The account would be tax-exempt while it remains a qualifying account, and limited rollover and post-acquisition transfer rules (including a narrow IRA transfer window) would apply. These rules would apply for tax years beginning after enactment.

Payroll tax break for account savers

If enacted, amounts you exclude from income for First-Time Homebuyer Savings Account contributions would not count as wages for payroll taxes. That would lower the wages subject to Social Security and Medicare taxes for employees who make such excluded contributions. It would also change employer withholding and wage reporting. This change would apply for tax years beginning after enactment.

Sponsors & CoSponsors

Sponsor

Mace, Nancy [R-SC-1]

SC • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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