Bipartisan legislation recently introduced in the U.S. House of Representatives would help aspiring first-time homebuyers save for a down payment.
The First Home Savings Opportunity Act would establish a savings account that would be used specifically to save money for a first home. The contributions would be tax-deductible with a cap of $10,000 a year for individuals and $20,000 for couples filing jointly.
The goal of the bill is to ease some of the pressure of breaking into the housing market and giving buyers a path to save for a down payment and closing costs.
“Recent data show that nearly half of potential homebuyers cannot afford a down payment, as the median age of first-time homebuyers, now 40, continues to rise,” Shannon McGahn, National Association of REALTORS executive vice president and chief advocacy officer, said. “For generations, access to homeownership has been the primary way Americans built wealth and homeownership remains the cornerstone of the American Dream. The bipartisan First Home Savings Opportunity Act would help turn aspiration into action, turning modest savings into the foundation of lifelong stability.”
U.S. Reps. Ashley Hinson (R-IA) and Suhas Subramanyam (D-VA) introduced the bill.
If the bill becomes law, it will apply to taxable years beginning after 2025.