H.R.3475 - Bipartisan American Homeownership Opportunity Act of 2025 (119th Congress)
Summary
H.R.3475, the Bipartisan American Homeownership Opportunity Act of 2025, aims to stimulate homeownership through two primary tax credits. The first is a first-time homebuyer credit, providing up to $50,000 as a credit against tax liability based on the down payment amount. The second is a starter home construction credit, offering a tax credit to builders for constructing smaller, more affordable homes.
The bill includes income limitations for the first-time homebuyer credit and sets criteria for qualifying homes under the construction credit, such as size and price. It also addresses recapture events, basis adjustments, and inflation adjustments for both credits.
The bill intends to make homeownership more accessible and incentivize the construction of affordable housing.
Expected Effects
The bill, if enacted, would likely increase demand for entry-level homes and stimulate construction of smaller, more affordable housing units. This could lead to increased homeownership rates, particularly among first-time buyers.
The tax credits could also provide an economic boost to the construction industry. However, the income limitations and housing criteria may restrict the credits' applicability in certain markets.
Furthermore, the recapture provisions aim to prevent abuse of the first-time homebuyer credit.
Potential Benefits
- Increased homeownership opportunities for first-time buyers through a substantial tax credit.
- Incentivizes construction of affordable "starter homes," addressing housing shortages.
- Potential economic stimulus for the construction industry and related sectors.
- Could lead to increased property tax revenues for local governments in the long term.
- The bill includes measures to prevent abuse of the tax credits, such as recapture provisions.
Potential Disadvantages
- The income limitations may exclude some potential homebuyers from receiving the full first-time homebuyer credit.
- The size and price restrictions on starter homes may not be feasible in all markets, limiting the effectiveness of the construction credit.
- The tax credits could increase the national debt if not offset by other revenue sources.
- Recapture provisions could create administrative burdens for both taxpayers and the IRS.
- The bill's effectiveness depends on the availability of mortgage loans and the overall health of the housing market.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). Congress has the power to lay and collect taxes (Article I, Section 8) and to spend money to promote the general welfare of the United States.
The bill does not appear to infringe upon any specific constitutional rights or limitations. The tax credits are applied uniformly and do not discriminate against any particular group.
However, the extent to which such a law truly promotes the general welfare is a matter of ongoing debate and interpretation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).