American Dream Accounts for Home Buyers Introduced

Senator Rick Scott (R-FL) has introduced S. 4026, the American Dream Accounts Act. According to a press release, the bill would do the following. 

• Allow first-time prospective homebuyers to contribute up to $7,500 a year ($10,000 if 35+ years old) to a Roth-IRA-style, untaxed savings account to be put toward their home purchase.
• Cap lifetime contributions at $250,000.
• Require that if a house is sold within 3-years of its American Dream Account-backed purchase, the withdrawn amount will become taxed (with certain exceptions), ensuring homes and tax-protected dollars are used for establishing primary residences, not quick flips.
• Allow any unused money, up to $100,000, to be rolled over to a Roth-IRA or to a family member’s American Dream Account.
• Require any money withdrawn for an unqualified purpose (i.e. not for a first-time home purchase) to be taxed and have an additional 10% tax applied.

This is one of many proposals and policy ideas floated in recent weeks aimed at making housing more accessible. The bill has been assigned to the Senate Committee on Finance for further consideration.