Sponsor
Tom Barrett
Representative · R-MI
Representative · R-MI
The bill expands HSA flexibility to help many middle‑class buyers save for and use tax‑favored funds toward buying, building, or repairing a home (with some spousal and emergency flexibility), but it reduces federal revenue, adds compliance complexity, and may leave those in high‑cost areas or who face limited provider options with smaller or costlier benefits.
Middle‑income homebuyers and prospective buyers who haven’t owned a home in the prior 3 years can reduce their taxable income by deducting cash contributions to an HSA up to annual limits, lowering their federal tax bill when saving for a home.
Homeowners and buyers who use HSA funds to buy or build a principal residence or to make qualifying repairs can exclude those distributions from gross income, directly reducing out‑of‑pocket costs for purchase and improvements.
Lower‑earning spouses filing jointly can use the higher‑earning spouse’s income to support HSA contributions, increasing access to the tax benefit for couples with disparate earnings.
All taxpayers could face higher federal budgetary costs because the law creates new tax deductions and income exclusions, reducing federal revenue and potentially increasing deficits or crowding out other spending.
Taxpayers will face added complexity and compliance costs from new account rules, contribution/balance limits, reporting requirements, and Treasury’s annual home price publication, raising time and possible tax preparation expenses.
Linking contribution/balance caps to a published national home price and applying income phaseouts reduces the benefit for people in high‑cost areas and for higher‑income households, limiting the law’s effectiveness where housing is most expensive.
Based on analysis of 4 sections of legislative text.
Creates a deductible homeowner savings account that lets eligible first-time buyers save for purchase, construction, or qualifying improvements, with contribution and balance limits tied to existing tax limits and an annual Treasury price benchmark.
Official title: To amend the Internal Revenue Code of 1986 to establish tax-advantaged homeowner savings accounts.
Introduced March 3, 2026 by Tom Barrett · Last progress March 3, 2026
Creates a new tax-preferred "homeowner savings account" that lets eligible first-time homebuyers deduct annual cash contributions to an account used to pay for buying, building, or improving a principal residence. The bill defines eligibility (no ownership interest in a principal residence during the prior 3 years), what counts as qualified expenses, contribution and account-balance limits tied to existing Internal Revenue Code limits, trustee and investment rules, and an annual Treasury requirement to publish an estimated national average single-family home price for the following year.