HR7216-119

What This Bill Does

The Make American Housing Affordable Act creates a federal income tax credit for home purchases. An eligible individual who purchases a principal residence during the taxable year receives a $5,000 credit, doubled to $10,000 for a joint return. The taxpayer cannot have received the credit during the four taxable years before the purchase year. The credit phases down when modified adjusted gross income exceeds $250,000 for an individual or $500,000 for a joint return, using a $50,000 phaseout range for individuals and a $100,000 range for joint filers. Modified adjusted gross income includes adjusted gross income plus amounts excluded under sections 911, 931, or 933. The bill makes conforming changes to deficiency and permanent-appropriation provisions and applies to taxable years beginning after enactment.

Who Benefits and How

First-time homebuyers, repeat homebuyers who have not claimed the credit during the prior four years, joint filers buying principal residences, middle-income households, real estate agents, mortgage lenders, homebuilders, and sellers benefit from a tax credit that can reduce the after-tax cost of buying a principal residence. Buyers below the phaseout thresholds receive the clearest value.

Who Bears the Burden and How

Federal revenue collections, IRS forms staff, tax preparers, mortgage-documentation reviewers, and homebuyers claiming the credit face new costs, forms, eligibility checks, purchase documentation, and income phaseout calculations. Higher-income buyers above the phaseout range receive little or no benefit. The IRS must administer refund and deficiency treatment for the new section 36C credit.

Key Provisions

• Creates a $5,000 housing affordability tax credit for eligible individuals buying a principal residence.
• Doubles the credit to $10,000 for joint returns.
• Bars taxpayers from claiming the credit if they received it during the four preceding taxable years.
• Phases out the credit above $250,000 of modified adjusted gross income for individuals.
• Phases out the credit above $500,000 of modified adjusted gross income for joint filers.
• Applies the new section 36C credit to taxable years beginning after enactment.