American Dream Accounts for Home Buyers Introduced in House

Representative Aaron Bean (R-FL), has introduced H.R. 9895, the American Dream Accounts Act. A companion bill was introduced by Senator Rick Scott (R-FL) earlier this year. The bill would do the following.

• Allow first-time prospective homebuyers to contribute up to $7,500 a year ($10,000 if 35+ years old) to a Roth-IRA-style, untaxed savings account to be put toward their home purchase.

• Cap lifetime contributions at $250,000.

• Require that if a house is sold within 3 years of its American Dream Account-backed purchase, the withdrawn amount will become taxed (with certain exceptions), ensuring homes and tax-protected dollars are used for establishing primary residences, not quick flips.

• Allow any unused money, up to $100,000, to be rolled over to a Roth-IRA or to a family member’s American Dream Account.

• Require any money withdrawn for an unqualified purpose (i.e. not for a first-time home purchase) to be taxed and have an additional 10% tax applied.