First-Time Homebuyer Tax Credit Act of 2025
Summary
The First-Time Homebuyer Tax Credit Act of 2025 introduces a refundable tax credit for first-time homebuyers. This credit is equal to 10% of the purchase price of a principal residence, capped at $15,000, with limitations based on area median income and purchase price. The bill amends the Internal Revenue Code of 1986 to implement these provisions.
Expected Effects
This act aims to stimulate the housing market and make homeownership more accessible. It will provide financial assistance to first-time homebuyers, potentially increasing demand and property values. The credit can also be transferred to mortgage lenders under certain conditions.
Potential Benefits
- Increased affordability for first-time homebuyers.
- Stimulation of the housing market through increased demand.
- Potential for increased property values.
- Flexibility in using the credit, including transfer to mortgage lenders.
- Inflation adjustment to maintain the credit's value over time.
Potential Disadvantages
- Phaseout based on income and area median purchase price may limit the credit's availability for some.
- Complexity in calculating the credit due to various limitations and adjustments.
- Potential for increased housing prices due to increased demand.
- Recapture provisions may penalize those who sell their homes within four years.
- Administrative burden on the IRS to manage and verify eligibility for the credit.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). Congress has the power to tax and spend for the general welfare. 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.
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).