Establishes a new first-time homebuyer credit allowing individuals to claim a tax credit of up to $25,000 for down payments on principal residences.
The credit amount is reduced based on the taxpayer’s modified adjusted gross income exceeding specified threshold amounts, which vary by filing status.
First-generation homebuyers can claim a higher credit of up to $50,000, provided they meet certain criteria regarding prior ownership of residential property.
Specifies conditions under which the credit is not available, including nonresident alien status and failure to provide required documentation.
Allows for an election for advanced payment of the credit through a qualifying escrow account, with specific rules for account management and fund usage.
Introduces a recapture provision for the credit if the property is sold or ceases to be the taxpayer’s principal residence within five years of purchase, with exceptions for certain circumstances like death or divorce.
Defines key terms such as “first-time homebuyer” and “principal residence” to clarify eligibility.
Includes an inflation adjustment mechanism for the credit amounts starting in 2025.
Establishes a starter home construction credit equal to 15% of qualified home construction costs, increasing to 30% for homes sold to first-time homebuyers.
Sets limits on the size and sale price of homes eligible for the construction credit, ensuring they remain affordable.
Allocates a state ceiling for the starter home construction credit based on population and unused credits from previous years, with provisions for inflation adjustments.
Requires the Secretary of the Treasury to issue regulations to implement the provisions of the legislation.
