Sponsors (2)
The bill provides immediate, targeted refundable tax credits to lower the upfront cost of buying a home—particularly helping low‑ and middle‑income buyers—while increasing federal spending, adding administrative complexity, and likely having limited impact on long‑term housing supply or affordability.
Homebuyers who purchase a principal residence receive a refundable tax credit of up to $5,000 per individual (or $10,000 for joint buyers), reducing their immediate out‑of‑pocket cost at purchase.
Low‑ and moderate‑income buyers benefit from the credit's refundable design even if they have little or no income tax liability, increasing access to homeownership for lower‑income households.
The credit phases out for higher earners (around $250k individual / $500k joint MAGI), concentrating assistance toward middle‑ and moderate‑income households rather than high‑income buyers.
All taxpayers may face higher federal budget costs because refundable credits increase government outlays and could raise the deficit or necessitate spending offsets or tax increases.
The credit may mostly help buyers who were already able to purchase a home, producing a limited effect on overall housing supply or long‑term housing affordability.
Complex eligibility rules and coordination with MAGI and exclusions risk increased compliance costs, administrative burden for the IRS, and potential improper claims or taxpayer confusion.
Based on analysis of 2 sections of legislative text.
Creates a refundable $5,000 ($10,000 joint) tax credit for purchasing a principal residence, with income phaseouts and a four-year receipt limit.
Introduced January 22, 2026 by Thomas Kean · Last progress January 22, 2026
Provides a new, refundable tax credit for people who buy a principal residence: $5,000 for single filers and $10,000 for joint filers. The credit is available only if the buyer has not received it in any of the four prior taxable years and is phased out for higher earners. The credit is added as a new Internal Revenue Code section and applies to taxable years beginning after enactment; the IRS will need to add the new code section and adjust tax forms and tables accordingly.