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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Funds withdrawn specifically for a down payment or closing costs on a first home are exempt from income tax.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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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
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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  • Funds withdrawn specifically for a down payment or closing costs on a first home are exempt from income tax.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.

CATEGORIES

Taxes Real Estate