Summary#
This bill creates a new federal tax credit for certain sellers who help first-time homebuyers with the costs of acquiring a house. The bill would add section 36C to the Internal Revenue Code. Under that section, an individual who sells their principal residence to a first-time homebuyer could claim a refundable credit. The credit amount is the lesser of:
- the amount the seller paid for the first-time homebuyer’s qualified home acquisition expenses for that residence; or
- the amount by which the seller’s tax liability would decrease if the seller did not include any gain from the sale in their gross income.
The bill defines “first-time homebuyer” as someone (and their spouse, if married) who did not own a principal residence during the 2 years before the sale. “Principal residence” is defined the same as in section 121 of the tax code. “Qualified home acquisition expenses” include costs such as down payments, inspection costs, and closing costs. The Secretary of the Treasury must issue regulations or guidance to implement the section. The changes apply to taxable years beginning after December 31, 2026. The bill also makes conforming amendments to related federal statute references.
What it means for you#
- If you sell your principal residence to a person who meets the bill’s definition of a first-time homebuyer and you pay that buyer’s qualifying acquisition costs, you may be able to claim a refundable tax credit for those payments, subject to the formula in the bill.
- If you are a first-time homebuyer, the bill sets a 2-year ownership test to qualify as a first-time buyer for this credit.
- The credit is refundable, meaning it can produce a refund if it exceeds the seller’s tax liability. Exact how to claim the credit and documentation requirements would be set by Treasury regulations.
Expenses#
- The bill lists examples of qualified home acquisition expenses: down payment, inspection costs, and closing costs.
- The bill text does not include any estimates of federal budgetary costs, revenue effects, or spending offsets. No publicly available information on estimated fiscal impact is provided in the bill text or metadata.
Proponents' View#
No publicly available information.
Opponents' View#
No publicly available information.