NEST Act
House Panel Reviews NEST Act to Create Tax-Free Savings Accounts for First-Time Homebuyers
Legislative Progress
Key Points
- This bill creates a new type of savings account designed to help people buy their first home. Money put into these accounts is tax-deductible, meaning it lowers your taxable income for the year, and the money grows tax-free while it is in the bank.
- To qualify, you must be at least 18 years old and cannot have owned a home in the last three years. The money in the account must be used for a down payment, construction costs, or closing costs for a primary residence.
- There is a limit on how much you can save based on where you live. You cannot contribute more than 20% of the average home price in your state over the lifetime of the account.
- Employers are allowed to contribute to these accounts for their workers. These employer contributions would not count as taxable income for the employee and would be exempt from Social Security and unemployment taxes.
- If you take money out for anything other than buying a home, you will have to pay regular income taxes on that money plus an extra 20% tax penalty. This ensures the funds are used specifically for housing.
- If the bill passes, these accounts would become available starting in 2026. The government would update the savings limits each year to keep up with rising home prices in different states.
Impact Analysis
Personal Impact
Life & Work
Small business owners gain a new tool to attract and retain employees. The bill allows employers to contribute to their workers' first-time homebuyer savings accounts, with those contributions excluded from income taxes, Social Security taxes, and unemployment taxes. This gives small businesses a tax-efficient way to offer an additional benefit that could help with recruitment, especially for younger workers saving for their first home.
Programs
Broader Impacts
Milestones
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
2 articles
Rep. Mann leads bipartisan bill to help first time home buyers
While focusing on the First-Time Homebuyer Empowerment Act, the report notes the introduction of the NEST Act by Rep. Cammack as part of a broader legislative push to provide tax-advantaged savings vehicles for individuals entering the housing market.
The GOP Is Restoring the American Dream of Homeownership
The Republican Study Committee's Reconciliation 2.0 framework includes the NEST Act, aimed at allowing Millennials and Gen Z to save for down payments tax-free. The policy is framed as a way to empower individuals rather than government through 'equal opportunity' tools.
Source Information
Document Type
Congressional Bill
Official Title
NEST Act
Data Sources
Sponsor
Cosponsors
(1)Analysis generated by AI. Always verify with official sources.