WASHINGTON, D.C. (WTWO/WAWV) — United States Senator Todd Young (R-Ind), along with Ruben Gallego (D-Ariz.), has introduced legislation that aims to help first-time homeowners in America.
The bill, named the Uplifting First-Time Homebuyers Act, would help Americans buy more homes by increasing the Individual Retirement Account (IRA) tax exemption withdrawal for first-time homebuyers.
The tax exemption was created by Congress in 1997 and allows first-time homebuyers to withdraw up to $10,000 from their IRAs without incurring the standard 10% early withdrawal penalty. The withdrawal can be used to buy, build or rebuild their first home.
The Uplifting First-Time Homebuyers Act would raise the qualified distribution from $10,000 to $50,000, a move Senator Young said would better align with today’s housing market.
“Homeownership is critical to strengthening families, building generational wealth, and cultivating stronger communities. By updating the IRA withdrawal limits to better match the realities of today’s economy, our bill will unlock more opportunities for Americans to become homeowners and invest in their future,” said Senator Young.
Senator Gallego added that updating the IRA homebuyer exception is long overdue, as the average price of a home since the exception was created has nearly quadrupled.
“Homeownership is the cornerstone of the American dream, and for good reason. Owning a home is a proven way to build generational wealth and retirement security. But too many young Americans feel like that dream is out of reach,” said Senator Gallego. “By updating the decades-old IRA homebuyer exception to reflect the reality of housing costs today, this bill helps make homeownership possible for the next generation.”
