119-hr4717

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4717 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 4717

To amend the Internal Revenue Code of 1986 to provide for a first-time 
 homebuyer credit, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 July 23, 2025

 Mr. Panetta (for himself, Mr. Thompson of California, Ms. Norton, Mr. 
Landsman, Mr. Thanedar, Ms. Bynum, Ms. Sewell, Mr. Carter of Louisiana, 
 Mr. Fields, Mr. Krishnamoorthi, Ms. Craig, Ms. Tokuda, Mr. Soto, Mr. 
 Suozzi, Ms. Scholten, Mrs. McClain Delaney, Mr. Tran, Mr. Davis of 
 North Carolina, Mr. Vindman, Ms. Brownley, Ms. Johnson of Texas, Mr. 
Jackson of Illinois, Mr. Cohen, Mr. Davis of Illinois, and Mr. Figures) 
 introduced the following bill; which was referred to the Committee on 
 Ways and Means

_______________________________________________________________________

 A BILL

To amend the Internal Revenue Code of 1986 to provide for a first-time 
 homebuyer credit, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``First-Time Homebuyer Tax Credit Act 
of 2025''.

SEC. 2. FIRST-TIME HOMEBUYER REFUNDABLE TAX CREDIT.

    (a) In General.--

Section 36 of the Internal Revenue Code of 1986 is 
amended to read as follows:

``

SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

 ``

    (a) Allowance of Credit.--In the case of an individual who is a 
first-time homebuyer of a principal residence in the United States 
during a taxable year, there shall be allowed as a credit against the 
tax imposed by this subtitle for such taxable year an amount equal to 
10 percent of the purchase price of the residence.
 ``

    (b) Limitations.--
 ``

    (1) Dollar limitation.--
 ``
        (A) In general.--Except as otherwise provided in 
 this paragraph, the credit allowed under subsection

    (a) shall not exceed $15,000.
 ``
        (B) Married individuals filing separately.--In 
 the case of a married individual filing a separate 
 return, subparagraph
        (A) shall be applied by 
 substituting `$7,500' for `$15,000'.
 ``
            (C) Other individuals.--If 2 or more individuals 
 who are not married purchase a principal residence, the 
 amount of the credit allowed under subsection

    (a) shall 
 be allocated among such individuals in such manner as 
 the Secretary may prescribe, except that the total 
 amount of the credits allowed to all such individuals 
 shall not exceed $15,000.
 ``

    (2) Phaseout based on area median income.--
 ``
        (A) In general.--The amount allowable as a credit 
 under subsection

    (a) (determined without regard to this 
 paragraph) shall be reduced (but not below zero) by the 
 amount which bears the same ratio to the amount which 
 is so allowable as--
 ``
            (i) the excess (if any) of--
 ``
            (I) the modified adjusted gross 
 income of the taxpayer for the taxable 
 year, over
 ``
            (II) 150 percent of the 
 applicable Area Medium Income, bears to
 ``
            (ii) 20 percent of the applicable Area 
 Median Income.
 ``
        (B) Modified adjusted gross income.--For purposes 
 of subparagraph
        (A) , the term `modified adjusted gross 
 income' means the adjusted gross income of the taxpayer 
 for the taxable year increased by any amount excluded 
 from gross income under 

section 911, 931, or 933.
 ``
            (C) Applicable area median income.--For purposes 
 of subparagraph
        (A) , the term `applicable Area Median 
 Income' means the Area Median Income set by the 
 Secretary of Housing and Urban Development with respect 
 to--
 ``
            (i) the area in which the principal 
 residence is located,
 ``
            (ii) the size of the household of the 
 taxpayer, and
 ``
            (iii) the calendar year in which the 
 principal residence is purchased.
 ``
            (D) Regulations and guidance.--The Secretary, 
 after consultation with the Secretary of Housing and 
 Urban Development, shall issue such regulations and 
 guidance as are necessary to carry out the purposes of 
 this subparagraph.
 ``

    (3) Limitation based on area median purchase price.--
 ``
        (A) In general.--The amount allowable as a credit 
 under subsection

    (a) (determined without regard to this 
 paragraph) shall be reduced (but not below zero) by the 
 amount which bears the same ratio to the amount which 
 is so allowable as--
 ``
            (i) the excess (if any) of--
 ``
            (I) the purchase price of the 
 principal residence, over
 ``
            (II) the amount which is equal to 
 110 percent of the area median purchase 
 price, bears to
 ``
            (ii) the amount which is equal to 15 
 percent of the area median purchase price.
 ``
        (B) Area median purchase price.--For purposes of 
 this paragraph, the term `area median purchase price' 
 means the median purchase price for a home in both the 
 area and the calendar year in which the purchase of the 
 principal residence takes place.
 ``
            (C) Regulations and guidance.--The Secretary, 
 after consultation with the Secretary of Housing and 
 Urban Development, shall promulgate such regulations 
 and guidance as are necessary to carry out the purposes 
 of this subparagraph, including for determining the 
 area median purchase price with respect to different 
 localities.
 ``

    (4) Inflation adjustment.--In the case of any taxable 
 year beginning in a calendar year after 2025, each of the 
 dollar amounts in paragraph

    (1) shall be increased by an amount 
 equal to--
 ``
        (A) such dollar amount, multiplied by
 ``
        (B) the cost-of-living adjustment determined 
 under 

section 1

    (f)

    (3) for the calendar year in which 
 the taxable year begins, determined by substituting 
 `calendar year 2024' for `calendar year 2016' in 
 subparagraph
        (A)
            (ii) thereof.
 Any increase determined under the preceding sentence shall be 
 rounded to the nearest multiple of $100.
 ``

    (5) Age limitation.--No credit shall be allowed under 
 subsection

    (a) with respect to the purchase of any residence 
 unless the taxpayer has attained age 18 as of the date of such 
 purchase. In the case of any taxpayer who is married (within 
 the meaning of 

section 7703), the taxpayer shall be treated as 
 meeting the age requirement of the preceding sentence if the 
 taxpayer or the taxpayer's spouse meets such age requirement.
 ``
            (c) === Definitions. ===
-For purposes of this section--
 ``

    (1) First-time homebuyer.--The term `first-time 
 homebuyer' means any individual if such individual (and if 
 married, such individual's spouse)--
 ``
        (A) has no present ownership interest in any 
 residence during the 3-year period ending on the date 
 of the purchase of the principal residence to which 
 this section applies, and
 ``
        (B) has not taken the credit under this section 
 in any other taxable year.
 ``

    (2) Principal residence.--The term `principal residence' 
 has the same meaning as when used in 

section 121.
 ``

    (3) Purchase.--
 ``
        (A) In general.--The term `purchase' means any 
 acquisition, but only if--
 ``
            (i) the property is not acquired from a 
 person related to the person acquiring such 
 property (or, if married, such individual's 
 spouse),
 ``
            (ii) the acquisition is financed through 
 a federally backed mortgage loan (as defined in 
 

section 4022 of the CARES Act), and
 ``
            (iii) the basis of the property in the 
 hands of the person acquiring such property is 
 not determined--
 ``
            (I) in whole or in part by 
 reference to the adjusted basis of such 
 property in the hands of the person 
 from whom acquired, or
 ``
            (II) under 

section 1014

    (a) (relating to property acquired from a 
 decedent).
 ``
        (B) Construction.--A residence which is 
 constructed by the taxpayer shall be treated as 
 purchased by the taxpayer on the date the taxpayer 
 first occupies such residence.
 ``

    (4) Purchase price.--The term `purchase price' means the 
 adjusted basis of the principal residence on the date such 
 residence is purchased.
 ``

    (5) Related persons.--A person shall be treated as 
 related to another person if the relationship between such 
 persons would result in the disallowance of losses under 
 

section 267 or 707

    (b) .
 ``
            (d) Exceptions.--No credit under subsection

    (a) shall be allowed 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
 ``

    (1) the taxpayer disposes of such residence (or such 
 residence ceases to be the principal residence of the taxpayer 
 (and, if married, the taxpayer's spouse)) before the close of 
 such taxable year,
 ``

    (2) a deduction under 

section 151 with respect to such 
 taxpayer is allowable to another taxpayer for such taxable 
 year, or
 ``

    (3) the taxpayer fails to attach to the return of tax for 
 such taxable year a properly executed copy of the settlement 
 statement used to complete such purchase.
 ``

    (e) Reporting.--If the Secretary requires information reporting 
under 

section 6045 by a person described in subsection

    (e)

    (2) thereof 
to verify the eligibility of taxpayers for the credit allowable by this 
section, the exception provided by 

section 6045

    (e)

    (5) shall not apply.
 ``

    (f) Recapture of Credit.--
 ``

    (1) In general.--Except as otherwise provided in this 
 subsection, if, during any taxable year before the close of the 
 recapture period, a taxpayer disposes of the principal 
 residence with respect to which a credit was allowed under 
 subsection

    (a) (or such residence ceases to be the principal 
 residence of the taxpayer), the tax imposed by this chapter for 
 such taxable year shall be increased by the recoverable amount 
 determined in paragraph

    (2) .
 ``

    (2) Recoverable amount.--For purposes of paragraph

    (1) , 
 the recoverable amount is the product of--
 ``
        (A) 25 percent of the amount of the credit 
 allowed under subsection

    (a) , multiplied by
 ``
        (B) the number of taxable years remaining in the 
 recapture period as of the beginning of the taxable 
 year in which the taxpayer disposes of the principal 
 residence.
 ``

    (3) Limitation based on gain.--In the case of the sale of 
 the principal residence to a person who is not related to the 
 taxpayer, the increase in tax determined under paragraph

    (1) shall not exceed the amount of gain (if any) on such sale. 
 Solely for purposes of the preceding sentence, the adjusted 
 basis of such residence shall be reduced by the amount of the 
 credit allowed under subsection

    (a) .
 ``

    (4) Exceptions.--
 ``
        (A) Death of a taxpayer.--Paragraph

    (1) shall not 
 apply to any taxable year ending after the date of the 
 taxpayer's death.
 ``
        (B) Involuntary conversion.--Paragraph

    (1) shall 
 not apply in the case of a residence which is 
 compulsorily or involuntarily converted (within the 
 meaning of 

section 1033

    (a) ) if the taxpayer acquires a 
 new principal residence during the 2-year period 
 beginning on the date of the disposition or cessation 
 referred to in paragraph

    (1) . Paragraph

    (1) shall apply 
 to such new principal residence during the recapture 
 period in the same manner as if such new principal 
 residence were the converted residence.
 ``
            (C) Transfers between spouses or incident to 
 divorce.--In the case of a transfer of a residence to 
 which 

section 1041

    (a) applies--
 ``
            (i) paragraph

    (1) shall not apply to such 
 transfer, and
 ``
            (ii) in the case of taxable years ending 
 after such transfer, paragraph

    (1) shall apply 
 to the transferee in the same manner as if such 
 transferee were the transferor (and shall not 
 apply to the transferor).
 ``
            (D) Special rule for members of the armed forces, 
 etc.--
 ``
            (i) In general.--In the case of the 
 disposition of a principal residence by an 
 individual (or a cessation referred to in 
 paragraph

    (1) ) after December 31, 2022, in 
 connection with Government orders received by 
 such individual, or such individual's spouse, 
 for qualified official extended duty service, 
 paragraph

    (1) and subsection
            (d) (2) shall not 
 apply to such disposition (or cessation).
 ``
            (ii) Qualified official extended duty 
 service.--For purposes of this section, the 
 term `qualified official extended duty service' 
 means service on qualified official extended 
 duty as--
 ``
            (I) a member of the uniformed 
 services,
 ``
            (II) a member of the Foreign 
 Service of the United States, or
 ``
            (III) an employee of the 
 intelligence community.
 ``
            (iii) === Definitions. ===
-Any term used in this 
 subparagraph which is also used in paragraph

    (9) of 

section 121
            (d) shall have the same 
 meaning as when used in such paragraph.
 ``
        (E) Disposition of residence in connection with 
 change of employment.--In the case of the disposition 
 of a principal residence by an individual (or a 
 cessation referred to in paragraph

    (1) ) after December 
 31, 2022, in connection with a change of employment 
 which meets the conditions described in 

section 217
            (c) , 
 paragraph

    (1) shall not apply to such disposition (or 
 cessation).
 ``

    (5) Joint returns.--In the case of a credit allowed under 
 subsection

    (a) with respect to a joint return, half of such 
 credit shall be treated as having been allowed to each 
 individual filing such return for purposes of this subsection.
 ``

    (6) Return requirement.--If the tax imposed by this 
 chapter for the taxable year is increased under this 
 subsection, the taxpayer shall, notwithstanding 

section 6012, 
 be required to file a return with respect to the taxes imposed 
 under this subtitle.
 ``

    (7) Recapture period.--For purposes of this subsection, 
 the term `recapture period' means the 4 taxable years beginning 
 with the taxable year in which the purchase of the principal 
 residence for which a credit is allowed under subsection

    (a) was made.
 ``

    (g) Election To Treat Purchase in Prior Year.--In the case of a 
purchase of a principal residence after December 31, 2023, a taxpayer 
may elect to treat such purchase as made on December 31 of the calendar 
year preceding such purchase for purposes of this section (other than 
subsections

    (b)

    (4) ,
            (c) , and

    (h) ).
 ``

    (h) Transfer of Credit.--
 ``

    (1) In general.--Subject to such regulations and other 
 guidance as the Secretary determines necessary, a taxpayer may 
 elect that the credit which would (but for this subsection) be 
 allowed to such taxpayer with respect to the purchase of a 
 principal residence shall be allowed to the mortgage lender 
 with respect to such purchase and not to such taxpayer.
 ``

    (2) Eligible entity.--For purposes of this subsection, 
 the term `eligible entity' means, with respect to the purchase 
 of the principal residence for which the credit is allowed 
 under subsection

    (a) , the mortgage lender which provides the 
 mortgage to the taxpayer and has--
 ``
        (A) registered with the Secretary for purposes of 
 this paragraph, at such time, and in such form and 
 manner, as the Secretary may prescribe,
 ``
        (B) prior to the election described in paragraph

    (1) and not later than at the time of such purchase, 
 disclosed to the taxpayer making such purchase--
 ``
            (i) the value of the credit allowed under 
 subsection

    (a) , and
 ``
            (ii) the amount provided by the mortgage 
 lender to such taxpayer as a condition of the 
 election described in paragraph

    (1) .
 ``
            (C) not later than at the time of such purchase, 
 made payment to such taxpayer (whether in cash or in 
 the form of a partial payment or down payment for the 
 purchase of such principal residence) in an amount 
 equal to the credit otherwise allowable to such 
 taxpayer, and
 ``
            (D) with respect to any incentive otherwise 
 available for taking a mortgage for which a credit is 
 allowed under this section, including any incentive in 
 the form of a rebate or discount provided by the 
 mortgage lender, ensured that--
 ``
            (i) the availability or use of such 
 incentive shall not limit the ability of a 
 taxpayer to make an election described in 
 paragraph

    (1) , and
 ``
            (ii) such election shall not limit the 
 value or use of such incentive.
 ``

    (3) Timing.--An election described in paragraph

    (1) shall 
 be made by the taxpayer not later than the date on which the 
 purchase of the principal residence with respect to which the 
 credit under subsection

    (a) is allowed is made.
 ``

    (4) Revocation of registration.--Upon determination by 
 the Secretary that a mortgage lender has failed to comply with 
 the requirements described in paragraph

    (2) , the Secretary may 
 revoke the registration (as described in subparagraph
        (A) of 
 such paragraph) of such mortgage lender.
 ``

    (5) Tax treatment of payments.--With respect to any 
 payment described in paragraph

    (2)
            (C) , such payment--
 ``
        (A) shall not be includible in the gross income 
 of the taxpayer, and
 ``
        (B) with respect to the mortgage lender, shall 
 not be deductible under this title.
 ``

    (6) Advance payment to mortgage lenders.--
 ``
        (A) In general.--The Secretary shall establish a 
 program to make advance payments to any eligible entity 
 in an amount equal to the cumulative amount of the 
 credits allowed under subsection

    (a) with respect to 
 any mortgages issued by such entity for which an 
 election described in paragraph

    (1) has been made.
 ``
        (B) Excessive payments.--Rules similar to the 
 rules of 

section 6417
            (d) (6) shall apply for purposes of 
 this paragraph.
 ``
            (C) Treatment of advance payments.--For purposes 
 of 

section 1324 of title 31, United States Code, the 
 payments under subparagraph
        (A) shall be treated in the 
 same manner as a refund due from a credit provision 
 referred to in subsection

    (b)

    (2) of such section.
 ``

    (7) Recapture.--In the case of any taxpayer who has made 
 an election described in paragraph

    (1) with respect to the 
 purchase of a principal residence and received a payment 
 described in paragraph

    (2)
            (C) from an eligible entity, such 
 principal residence shall be treated as a principal residence 
 with respect to which a credit was allowed under subsection

    (a) for purposes of subsection

    (f) .''.

    (b) Certain Errors With Respect to First-Time Homebuyer Tax Credit 
Treated as Mathematical or Clerical Errors.--Paragraph

    (2) of 

section 6213

    (g) of the Internal Revenue Code of 1986, as amended by Public Law 
119-21, is amended by striking ``and'' at the end of subparagraph
        (Z) , 
by striking the period at the end of subparagraph

    (AA) and inserting 
``, and'', and by inserting after subparagraph

    (AA) the following new 
subparagraph:
 ``

    (BB) an entry on a return claiming the credit 
 under 

section 36 if--
 ``
            (i) the Secretary obtains information 
 from the person issuing the TIN of the taxpayer 
 that indicates that the taxpayer does not meet 
 the age requirement of 

section 36

    (b)

    (4) ,
 ``
            (ii) information provided to the 
 Secretary by the taxpayer on an income tax 
 return for at least one of the 2 preceding 
 taxable years is inconsistent with eligibility 
 for such credit, or
 ``
            (iii) the taxpayer fails to attach to the 
 return the form described in 

section 36
            (d) (3) .''.
            (c) Effective Date.--The amendments made by this section shall 
apply with respect to principal residences purchased after the date of 
the enactment of this Act.
 <all>