Sponsor
Scott Perry
Representative · R-PA
Representative · R-PA
Creates tax-deductible "home savings accounts" with cash contribution deductions up to $10,000 per person ($20,000 joint) for home purchase or acquisition debt.
The bill creates a tax-advantaged savings vehicle that helps prospective homeowners reduce taxable income and withdraw funds tax-free for home purchases, but does so with contribution limits, potential penalties, added complexity, and risks to retirement savings and federal revenue.
Homebuyers and prospective homeowners can deduct up to $10,000 ($20,000 joint) in annual cash contributions to a dedicated home savings account, lowering their taxable income while they save for a primary residence.
Homebuyers who use the account for a principal residence can withdraw funds for qualified housing expenses tax-free, making withdrawals for a home purchase exempt from gross income.
IRA holders can make a one-time rollover from an IRA into a home savings account (within limits), enabling tax-favored use of some retirement savings toward buying a home without immediate tax on that transfer.
Taxpayers and financial institutions face added complexity and new reporting requirements for trustees and filers, increasing compliance burden and potential administrative costs.
Low-income individuals and younger savers are disadvantaged because contributions must be cash and annual caps may be unreachable for those with limited disposable income, reducing equity of the benefit.
Account beneficiaries who withdraw funds for non-qualified purposes will face inclusion of those distributions in gross income plus a 20% penalty, risking large tax bills if circumstances force non-housing withdrawals.
Based on analysis of 1 section of legislative text.
Official title: To amend the Internal Revenue Code of 1986 to allow a deduction for amounts contributed to home savings accounts, and for other purposes.
Introduced June 25, 2026 by Scott Perry · Last progress June 25, 2026
Creates a new tax-preferred "home savings account" that lets individuals deduct cash contributions made in a taxable year up to $10,000 per person ($20,000 married filing jointly) to save for a principal residence or to pay down acquisition debt. The accounts are structured as U.S. trusts with rules modeled on many IRA provisions, are exempt from income tax while qualifying, and may be subject to unrelated business income tax if applicable. The bill defines eligible accounts, qualified housing expenses (home purchase and certain acquisition indebtedness payments and limited refinancings), contribution limits, trustee and investment rules, and beneficiary protections. It also cross-applies specified existing IRA rules to these accounts and disallows the deduction for dependents claimed by another taxpayer.