First-Time Homebuyer Tax Credit Act of 2025
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed House
- 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 further limitation based on 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, capped at $15,000 for individuals and $7,500 for married couples filing separately.
- Phase-out of the credit based on modified adjusted gross income and area median income.
- Limits the credit based on the area median purchase price.
- Establishes a recapture period of four taxable years following the purchase.
- Allows mortgage lenders to elect to receive the credit instead of taxpayers.
- Defines ‘first-time homebuyer’ as an individual with no present ownership interest in a residence during the three years preceding the purchase.
- Includes a provision for advance payments to mortgage lenders who meet certain criteria.
- Addresses errors related to age requirements and taxpayer information inconsistencies.
Who is affected
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