H.R.2748 - First Time Homeowner Savings Plan Act (119th Congress)
Summary
H.R.2748, the First Time Homeowner Savings Plan Act, proposes to amend the Internal Revenue Code of 1986 to increase the penalty-free amount that can be withdrawn from individual retirement plans for first-time home purchases. The bill raises the limit from $10,000 to $25,000 and includes a provision for inflation adjustment starting in 2026. This adjustment would be based on the cost-of-living index, rounded to the nearest multiple of $100.
Expected Effects
The primary effect of this bill would be to allow first-time homebuyers to access a larger portion of their retirement savings without incurring a penalty. This could make homeownership more accessible to some individuals. The inflation adjustment ensures the increased limit maintains its value over time.
Potential Benefits
- Increased access to funds for first-time homebuyers.
- Potential stimulation of the housing market.
- Provides an inflation adjustment to maintain the real value of the increased withdrawal limit.
- Could encourage more people to save for retirement knowing they can access funds for a home purchase.
- Simplifies the process of using retirement funds for a down payment.
Potential Disadvantages
- Could reduce retirement savings, potentially impacting long-term financial security.
- May contribute to increased demand in the housing market, potentially driving up prices.
- The inflation adjustment may not fully keep pace with actual housing cost increases.
- Could incentivize individuals to prioritize homeownership over retirement savings.
- Potential for misuse of funds withdrawn for purposes other than a first home.
Constitutional Alignment
This bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8 of the Constitution. Specifically, it relates to the regulation of individual retirement accounts and the tax implications of withdrawals. 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).