H.R.3526 - Uplifting First-Time Homebuyers Act of 2025 (119th Congress)
Summary
H.R.3526, the Uplifting First-Time Homebuyers Act of 2025, proposes to amend the Internal Revenue Code of 1986 by increasing the limitation on qualified first-time homebuyer distributions from $10,000 to $50,000. This change would apply to taxable years beginning after December 31, 2024. The bill was introduced in the House of Representatives by Ms. Van Duyne and referred to the Committee on Ways and Means.
Expected Effects
The primary effect of this bill, if enacted, would be to allow first-time homebuyers to withdraw up to $50,000 from retirement accounts without penalty for use towards a down payment on a home. This could potentially stimulate the housing market by making homeownership more accessible to first-time buyers. It may also impact individual retirement savings, depending on how homebuyers utilize this provision.
Potential Benefits
- Increased accessibility to homeownership for first-time buyers.
- Potential stimulus to the housing market.
- Provides greater flexibility for individuals to use retirement savings for a significant life purchase.
- May encourage more people to invest in retirement accounts knowing funds can be accessed for home purchase.
- Could lead to increased economic activity related to home sales (e.g., real estate, construction, home improvement).
Potential Disadvantages
- Potential reduction in retirement savings for individuals who utilize this provision.
- Risk of depleting retirement funds, especially if the homebuyer faces financial difficulties later.
- Could contribute to increased housing prices if demand surges without a corresponding increase in housing supply.
- May disproportionately benefit higher-income individuals who already have substantial retirement savings.
- Potential for misuse or abuse of the provision.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to promote homeownership. Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States. This bill falls under Congress's power to modify the tax code. The bill does not appear to infringe upon any specific constitutional rights or limitations.
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).