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Tax Deduction for Saving for a First Home Down Payment

This Act establishes new Down Payment Savings Accounts (DPSA) designed exclusively to cover the costs of purchasing a first principal residence, such as down payments and closing costs. Contributions to these accounts are tax-deductible, and withdrawals used for qualified home purchase expenses are tax-free, significantly easing the financial burden for first-time homebuyers.
Key points
Creates a new tax-advantaged savings account (DPSA) where contributions are deductible from taxable income, reducing your current tax bill.
The annual contribution limit for the deduction is $10,000 ($20,000 for joint filers), subject to inflation adjustments after 2025.
Funds withdrawn specifically for a down payment or closing costs on a first home are exempt from income tax.
Non-qualified withdrawals are subject to income tax plus an additional 20% penalty, unless due to death or disability.
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Status: Introduced
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Additional Information
Print number: 119_HR_6542
Sponsor: Rep. Subramanyam, Suhas [D-VA-10]
Process start date: 2025-12-09
System Note: Lustra is free, publicly auditable civic infrastructure — full source code available on GitHub. You are reading sterilized legislative data, processed by our radical neutrality engine to strip political spin and retain factual mechanics. We process only official government data. Original documents remain the authoritative source—always verify them if you can.
Summarized by: gemini-flash-latest
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

First Home Savings Opportunity Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_6542.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-12-09.

What are the main provisions?

Key points include:

  • Creates a new tax-advantaged savings account (DPSA) where contributions are deductible from taxable income, reducing your current tax bill.
  • The annual contribution limit for the deduction is $10,000 ($20,000 for joint filers), subject to inflation adjustments after 2025.
  • Funds withdrawn specifically for a down payment or closing costs on a first home are exempt from income tax.
  • Non-qualified withdrawals are subject to income tax plus an additional 20% penalty, unless due to death or disability.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Subramanyam, Suhas [D-VA-10].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-31.

What is the impact of this bill?

We don't know—that is up to you to decide. Summarizing raw data with AI is fundamentally different from predicting socio-economic outcomes. As of 2026, we believe impact assessment strictly requires a human in the loop to verify and judge.

CATEGORIES

Taxes Real Estate