To amend the Internal Revenue Code of 1986 to allow a deduction for amounts contributed to home savings accounts, and for other purposes.

Key Points

• The bill creates a new 'home savings account' where people can deduct money they put in from their taxes, similar to a retirement account but for buying a home or paying down a mortgage.
• You could deduct up to $10,000 a year if single or $20,000 if married filing jointly, and this deduction applies even if you don't itemize other deductions.
• Money withdrawn from the account is completely tax free as long as it's used to buy a first home or pay down extra mortgage principal.
• If the money is used for anything other than housing expenses, it becomes taxable income plus an extra 20 percent penalty tax, discouraging people from misusing the account.
• People can move money one time, tax free, from a traditional IRA into a home savings account, which could help someone with retirement savings but not enough cash on hand for a down payment.
• If passed, the new accounts and deduction would only apply starting with the 2027 tax year, and the contribution limits would rise over time with inflation.