First-time homebuyers would have access to a tax-advantaged savings account to help incentivize home purchases under a bill from U.S. Reps. Barbara Comstock (R-VA) and Mike Coffman (R-CO) that is designed to help young people save for one of the biggest purchases they will ever make.
First-time homebuyers filing joint taxes would be able to deposit up to $28,000 per year into a 529-style savings account like those currently used to save for college education under the First-Time Homebuyer Savings Account Act, H.R. 2802.
“Buying a home is one of the best ways to lift people into the middle class and keep them there, which is why this bipartisan legislation is so important — it gives first time home buyers the tools they need to save and buy their first house,” Comstock said. “We have many young families settling into Virginia’s 10th congressional district, and the bipartisan First-Time Homebuyer Savings Account Act will help young families purchase their first home by making the down payment of a first-time purchase more affordable. This legislation will help more families achieve the American dream of homeownership.”
The maximum lifetime investment would be capped at $50,000 under H.R. 2802. There would be no time limits on these accounts, and investments could grow up to $150,000 tax-free.
“The American dream of homeownership is getting harder and harder to attain for those starting out on their own these days, especially millennials, because of the challenges involved in saving up for the down payment,” Coffman said. “The First-Time Homebuyer Savings Account Act is a straightforward and bipartisan solution to this problem. If we can help millennials attain homeownership, this would not only be a wise financial move for them, but would have broader positive financial impact for our economy as a whole.”
Limits established under the bill would be automatically adjusted for inflation, and the tax-free accounts could only be used to make a down payment on a first-time home, or to pay related costs.
Comstock and Coffman introduced the bill with bipartisan support from U.S. Rep. Sean Patrick Maloney (D-NY).