Congresswoman Beth Van Duyne (R-TX) and Congresswoman Julia Brownley (D-CA) have introduced the Uplifting First-Time Homebuyers Act, a bipartisan bill aimed at helping first-time homebuyers by increasing the IRA early withdrawal tax exemption limit from $10,000 to $50,000.
The original exemption, enacted in 1997, allowed first-time buyers to withdraw up to $10,000 from their Individual Retirement Accounts (IRAs) without facing the standard 10% early withdrawal penalty. At the time, the median U.S. home price was $115,000. Today, that figure has risen to nearly $300,000, prompting calls for an update to the outdated threshold.
Under the proposed legislation, eligible first-time buyers would be able to withdraw up to $50,000 from their IRA accounts to purchase, build, or rebuild a home.
“Buying a home for the first time is not as easy as it once was,” said Rep. Van Duyne. “By updating and increasing the IRA withdrawal limit, we increase access to much needed capital for our first-time homebuyers.”
Rep. Brownley echoed the sentiment, adding, “Too many first-time buyers are locked out of the market due to rising prices and the challenge of saving for a down payment.”
The National Association of REALTORS® has voiced support for the bill. “This commonsense fix helps more Americans achieve the dream of homeownership earlier in life—and start building equity and long-term financial stability,” said Shannon McGahn, Executive Vice President & Chief Advocacy Officer for the organization.
The Uplifting First-Time Homebuyers Act is currently awaiting further consideration in the U.S. House of Representatives.
