[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7756 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 7756
To amend the Internal Revenue Code of 1986 to establish tax-advantaged
homeowner savings accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 3, 2026
Mr. Barrett introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish tax-advantaged
homeowner savings accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``First-time Homebuyer Savings Account
Act of 2026''.
SEC. 2. HOMEOWNER SAVINGS ACCOUNT.
(a) In General.--Part VII of subchapter B of chapter 1 of subtitle
A of the Internal Revenue Code of 1986 is amended by inserting after
section 225 the following new section:
``SEC. 225A. HOMEOWNER SAVINGS ACCOUNT.
``(a) Deduction Allowed.--In the case of an eligible individual,
there shall be allowed as a deduction for the taxable year an amount
equal to the aggregate amount paid in cash during such taxable year by
or on behalf of such individual to a homeowner savings account of such
individual.
``(b) Definitions.--For purposes of this section--
``(1) Homeowner savings account.--The term `homeowner
savings account' means a trust created or organized in the
United States as a homeowner savings account exclusively for
the purpose of paying qualified homeowner expenses of the
account beneficiary, but only if the written governing
instrument creating the trust meets the following requirements:
``(A) Except in the case of a rollover
contribution, no contribution will be accepted--
``(i) unless it is in cash,
``(ii) to the extent such contribution,
when added to previous contributions to the
trust for the calendar year, exceeds the amount
in effect for the calendar year under
subparagraph (A) of section 219(b)(5)
(determined without regard to subparagraph (B)
thereof), and
``(iii) to the extent that after such
contribution the amount held in the account
would exceed an amount equal to 20 percent of
the amount published under paragraph (6) for
the year in which the contribution is made.
``(B) The trustee is a bank (as defined in section
408(n)), an insurance company (as defined in section
816), or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
such person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(E) The interest of an individual in the balance
in his account is nonforfeitable.
``(2) Eligible individual.--The term `eligible individual'
means an individual if such individual (and, if married, such
individual's spouse) had no present ownership interest in a
principal residence during the 3-year period ending on the
present date.
``(3) Qualified homeowner expenses.--The term `qualified
homeowner expenses' means amounts paid or incurred to--
``(A) purchase or construct the principal residence
of the individual if such individual had no present
ownership interest in a principal residence during the
3-year period ending on the date of the purchase or
beginning of construction of the principal residence,
or
``(B) make alterations, repairs, or improvements
which meet the requirements of section 143(k)(4)
(determined without regard to the dollar limitation
provided in such section) to such principal residence
so purchased or constructed.
``(4) Account beneficiary.--The term `account beneficiary'
means the individual on whose behalf the homeowner savings
account was established.
``(5) Principal residence.--The term `principle residence'
has the same meaning as when used in section 121.
``(6) Publication of national average single family home
price.--The Secretary of the Treasury shall, not later than
December 31 of each calendar year, publish the estimated
national average price of a single family home for the
following calendar year.
``(7) Rollover contribution.--The term `rollover
contribution' means an amount paid or distributed from a
homeowner savings account to the account beneficiary to the
extent that--
``(A) the amount received is paid into a homeowner
savings account for the benefit of such beneficiary not
later than the 60th day after the day on which the
beneficiary receives the payment or distribution, and
``(B) such account beneficiary did not receive any
other amount described in subparagraph (A) from a
homeowner savings account which was not includible in
the individual's gross income because of subsection
(d)(2)(B) during the 1-year period ending on the date
of such receipt.
``(c) Treatment of Contributions.--
``(1) Contribution limit.--The aggregate amount of
contributions for any taxable year to all homeowner savings
accounts maintained for the benefit of an individual shall not
exceed the lesser of--
``(A) the amount in effect for the taxable year in
which such contributions are made under subparagraph
(A) of section 219(b)(5) (determined without regard to
subparagraph (B) thereof),
``(B) an amount equal to the compensation
includible in the individual's gross income for such
taxable year, or
``(C) the amount that would result in the amount
held in the account exceeding an amount equal to 20
percent of the amount published under subsection (b)(6)
for the year in which the contribution is made.
``(2) Limitation based on modified adjusted gross income.--
The amount determined under paragraph (1)(A) for any taxable
year shall be reduced (but not below zero) by the amount which
bears the same ratio to such amount as--
``(A) the excess of--
``(i) the taxpayer's adjusted gross income
for such taxable year, over
``(ii) the applicable dollar amount (as
defined in section 219(g)(3)(B), determined
after the application of section 219(g)(8)),
bears to
``(B) $10,000 ($20,000 in the case of a joint
return or a married individual filing a separate
return).
The rules of subparagraphs (B) and (C) of section 219(g)(2)
shall apply to any reduction under this paragraph.
``(3) Spousal contribution.--
``(A) In general.--In the case of an individual to
whom this paragraph applies for the taxable year, the
limitation of paragraph (1) shall be equal to the
lesser of--
``(i) the compensation includible in such
individual's gross income for the taxable year,
plus
``(ii) the compensation includible in the
gross income of such individual's spouse for
the taxable year reduced by the amount allowed
as a deduction under subsection (a) to such
spouse for such taxable year.
``(B) Individual to whom subparagraph (a)
applies.--Subparagraph (A) shall apply to any
individual if--
``(i) such individual files a joint return
for the taxable year, and
``(ii) the amount of compensation (if any)
includible in such individual's gross income
for the taxable year is less than the
compensation includible in the gross income of
such individual's spouse for the taxable year.
``(d) Treatment of Distributions.--
``(1) Amounts used for qualified homeowner expenses.--Any
amount paid or distributed out of a homeowner savings account
which is used exclusively to pay qualified homeowner expenses
shall not be includible in gross income.
``(2) Inclusion of amounts not used for qualified homeowner
expenses.--Any amount paid or distributed out of a homeowner
savings account which is not--
``(A) used exclusively to pay the qualified
homeowner expenses of the account beneficiary,
``(B) an exempted distribution, or
``(C) a rollover contribution,
shall be included in the gross income of such beneficiary and
the amount of any tax imposed by this chapter shall be
increased by 10 percent on any amount so includible.
``(3) Exempted distribution.--For purposes of this
subsection, the term `exempted distribution' means an amount
paid or distributed out of a homeowner savings account by
reason of--
``(A) an emergency, including--
``(i) the loss of a job or major source of
income, or
``(ii) a major health event leading to
substantial medical expenses,
``(B) a life event, including--
``(i) acquiring a present ownership
interest in a principal residence by reason of
marriage,
``(ii) death of the account beneficiary, or
``(iii) the account beneficiary residing
outside the United States, or
``(C) such other circumstances as the Secretary
determines appropriate by regulation.
``(4) Excess contributions returns before due date of
return.--
``(A) In general.--If any excess contribution is
contributed for a taxable year to any homeowner savings
account of an individual, paragraph (2) shall not apply
to distributions from the homeowner savings accounts of
such individual (to the extent such distributions do
not exceed the aggregate excess contributions to all
such accounts of such individual for such year) if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in clause (ii) shall be
included in the gross income of the individual for the
taxable year in which it is received.
``(B) Excess contribution defined.--For purposes of
subparagraph (A), the term `excess contribution' means
any contribution (other than a rollover contribution)
which is not excludable from gross income under this
section.
``(e) Tax Treatment of Accounts.--
``(1) In general.--A homeowner savings account is exempt
from taxation under this subtitle unless such account has
ceased to be a homeowner savings account. Notwithstanding the
preceding sentence, any such account is subject to the taxes
imposed by section 511 (relating to imposition of tax on
unrelated business income of charitable, etc. organizations).
``(2) Account termination.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to
homeowner savings accounts, and any amount treated as
distributed under such rules shall be treated as not used to
pay qualified homeowner expenses.
``(f) Custodial Account.--For purposes of this section, a custodial
account shall be treated as a trust if the assets of such account are
held by a bank (as defined in section 408(n)) or another person who
demonstrates, to the satisfaction of the Secretary, that the manner in
which he will administer the account will be consistent with the
requirements of this section, and if the custodial account would,
except for the fact that it is not a trust, constitute an account
described in subsection (b)(1). For purposes of this title, in the case
of a custodial account treated as a trust by reason of the preceding
sentence, the custodian of such account shall be treated as the trustee
thereof.''.
(b) Tax on Excess Contributions.--
(1) In general.--Section 4973(a) of such Code is amended--
(A) in paragraph (5), by striking ``or'',
(B) in paragraph (6), by inserting ``or'' after the
comma, and
(C) by inserting after paragraph (6) the following
new paragraph:
``(7) a homeowner savings account (within the meaning of
section 225A(b)(1)),''.
(2) Definition of excess contribution in 4973.--Section
4973 of such Code is amended by adding at the end the following
new subsection:
``(i) Excess Contributions to Homeowner Savings Account.--For
purposes of this section, in the case of a homeowner savings account
(within the meaning of section 225A(b)(1)), the term `excess
contribution' means the amount by which the amount contributed for the
taxable year to such account exceeds the contribution limit under
225A(c)(1).''.
(c) Clerical Amendment.--The table of sections for part VII of
subchapter B of chapter 1 of subtitle A of such Code is amended by
inserting after the item relating to section 225 the following new
item:
``Sec. 225A. Homeowner savings account.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
<all>
First-time Homebuyer Savings Account Act of 2026
#7756 | HR Congress #119
Policy Area: Taxation
Subjects:
Last Action: Referred to the House Committee on Ways and Means. (3/3/2026)
Bill Text Source: Congress.gov
Summary and Impacts
Original Text