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Congress·In Committee·H.R. 7756

Rep. Barrett Introduces Bill to Create Tax-Free Savings Accounts for First-Time Homebuyers

First-time Homebuyer Savings Account Act of 2026

16 days ago·View on Congress.gov

Legislative Progress

House
Senate
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Law

Key Points

  • This bill creates a new tax-advantaged savings account for people who haven't owned a home in the last three years. Contributions are tax-deductible, similar to a traditional IRA, helping first-time buyers save for a down payment faster by lowering their taxable income each year they contribute.

    From policy text

    “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.”
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  • Money in the account can be used tax-free to buy or build a first home, or to make major repairs and improvements on that home. As long as the funds go toward these qualified expenses, withdrawals and any investment gains are completely exempt from income tax.

    From policy text

    “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.”
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  • Annual contributions are capped at roughly the same level as IRA limits, and total account balances cannot exceed 20% of the national average single-family home price. Higher-income individuals will see their deduction gradually reduced and phased out, targeting the benefit toward middle- and lower-income savers.

    From policy text

    “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.”
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  • Withdrawals for non-housing purposes are hit with regular income tax plus a 10% penalty. However, the bill carves out penalty-free exceptions for emergencies like job loss, major medical expenses, getting married and gaining a home that way, death, or living abroad.

    From policy text

    “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.”
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  • The bill takes effect for tax years beginning after the date it's signed into law. The Treasury Secretary would be required to publish the estimated national average home price each year to set the account balance cap.

    From policy text

    “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.”
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HousingTaxes

Impact Analysis

Personal Impact

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions
Mar 3, 2026House

Referred to the House Committee on Ways and Means.

Mar 3, 2026

Introduced in House

What Happens Next

Projected impacts based on AI analysis

First full tax year after enactment

New homeowner savings accounts become available at banks and financial institutions

First-time buyers could start contributing pre-tax dollars toward a home down payment for the first tax year after the law is signed

By December 31 of the year before accounts take effect

Treasury publishes the national average single-family home price to set account balance caps

Savers will know the maximum they can accumulate in their account (20% of the published average price), which sets the practical ceiling for the tax benefit

Source Information

Document Type

Congressional Bill

Official Title

First-time Homebuyer Savings Account Act of 2026

Bill NumberHR 7756
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Analysis generated by AI. Always verify with official sources.