Home Purchase Distributions Without Penalty Proposed

Representative John McGuire (R-VA) has sponsored H.R. 7185, the Home Savings Act. According to a press release, the bill would permit penalty-free withdrawals from a defined contribution plan for a down payment or closing costs on a primary residence. The proposal would also allow individuals to make penalty-free withdrawals and gift those funds to an eligible relative for a down payment or closing costs on a primary residence. The bill would apply to distributions made after December 31, 2025, but no later than December 31, 2030.