First-Time Home Buyer Accounts Proposed

Representative Nancy Mace (R-SC) has introduced H.R. 8221, the First-Time Homebuyer Savings Act in the House. The bill is one of several that have been unveiled in recent weeks intended to make home buying more achievable. According to a press release, the bill would do the following.

• Individuals who qualify as first-time homebuyers could create a First-Time Homebuyer Savings Account.
• Eligible individuals can contribute up to $10,000 annually in pre-tax funds to the account.
• Funds in the accounts can be invested and grow tax-free.
• Funds can be withdrawn tax-free when used for qualified homebuying expenses, including the purchase or building of their first principal residence, and early homeownership expenses in the first three years of homeownership.
• Three years after the home is acquired, the account is terminated and remaining funds in the account can be rolled over into an individual retirement account (IRA) or distributed.
• Eligibility would restrict individuals whose adjusted gross income is over $200,000 (or $400,000 for joint filers) from taking advantage of these accounts.

The bill has been referred to the House Committee on Ways and Means.