Congress·In Committee·S. 2867

Congress proposes raising penalty-free retirement withdrawals for first-time homebuyers to $50,000

Uplifting First-Time Homebuyers Act of 2025

6 months ago·View on Congress.gov

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Stalled

No legislative action in over 90 days.

Legislative Progress

Senate

House

President

Law

Key Points

Congress would raise the limit for penalty-free retirement withdrawals used to buy a first home from $10,000 to $50,000.
This could let first-time buyers tap more of their retirement money for a down payment or closing costs without the early-withdrawal penalty.
The change would apply to tax years starting after December 31, 2024, so it could affect withdrawals made for 2025 and later taxes.
It may help some people buy sooner, but it also means taking more money out of retirement savings that won’t be there later.

TaxesHousing

Impact Analysis

Personal Impact

How this policy affects specific groups of people

Mixed Impacts(1)

Renter

Neutral

Positive Impacts(1)

Housing Assistance

Helps

Milestones

2 milestones2 actions

Sep 18, 2025Senate

Read twice and referred to the Committee on Finance.

Sep 18, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

2025-01-01

Higher $50,000 limit applies for taxable years beginning after December 31, 2024

If the bill becomes law, eligible first-time homebuyers could use the larger penalty-free IRA withdrawal when filing taxes for covered years, including withdrawals taken during 2025 (and later) within those tax years.

Early 2026 tax filing season

Tax filing using the higher limit shows up on the next filed return for many households

If you used the penalty-free first-time homebuyer withdrawal during 2025, you’d typically reflect that when you file your 2025 federal tax return.

Related News

4 articles

Plan Sponsor Council of America (PSCA)

Lawmakers Consider Increasing IRA Homebuyer Distribution Limit

Coverage of the Uplifting First-Time Homebuyers Act proposal to raise IRA penalty-free first-home distributions from $10,000 to $50,000, summarizing current-law rules and noting House and Senate introductions.

Senator Young (press release hosted on official site)·6 months ago

Young, Gallego Introduce Bill to Help First-Time Homebuyers

Announcement of S.2867 describing the proposal to increase the IRA first-time homebuyer penalty-free withdrawal cap to $50,000 and listing supporting organizations.