First-Time Homebuyer Tax Credit Act of 2025
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
This bill, the First-Time Homebuyer Tax Credit Act of 2025, proposes a refundable tax credit for first-time homebuyers purchasing a principal residence in the United States. The credit is equal to 10% of the purchase price, up to a maximum of $15,000 for individuals and $7,500 for married couples filing separately. The credit is subject to phase-out based on the taxpayer’s modified adjusted gross income and the area median income where the residence is located, with a maximum credit amount determined by the area median purchase price. The bill also includes provisions for recapture of the credit if the residence is sold before the end of the recapture period and establishes a mechanism for mortgage lenders to receive the credit instead of taxpayers.
Key provisions
- Provides a 10% refundable tax credit for first-time homebuyers.
- Maximum credit of $15,000 for individuals and $7,500 for married couples filing separately.
- Credit is phased out based on modified adjusted gross income and area median income.
- Credit is limited by the area median purchase price.
- Establishes a recapture period for the credit if the residence is sold before four years after purchase.
- Allows mortgage lenders to elect to receive the credit instead of taxpayers.
- Includes an age requirement for taxpayers (must be 18 or older at the time of purchase).
- Defines ‘first-time homebuyer’ as someone who has not owned a residence in the past three years.
Who is affected
- First-time homebuyers
- Mortgage lenders
Bill text
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