Sen. Rick Scott on Friday introduced legislation that would create a tax-advantaged savings account for first-time homebuyers, positioning the proposal as a way to help Americans save for a down payment amid continued housing affordability pressures.
The measure, titled the American Dream Accounts Act of 2026, would establish “American dream accounts” under the federal tax code for use in saving toward the purchase of a first home. Under the bill, individuals could generally contribute up to $7,500 per year, while beneficiaries older than 35 would be allowed to contribute up to $10,000 annually. Total lifetime contributions would be capped at $250,000.
Funds withdrawn from the accounts for a qualified first-time home purchase would not be subject to federal income tax. The legislation would allow up to $500,000 in qualified distributions for a single buyer, or up to $250,000 per person if two buyers jointly purchase a residence and both use the accounts. The bill would limit beneficiaries to one qualified first-time homebuyer distribution.
The proposal also includes restrictions meant to discourage short-term use of the tax benefit. If a home purchased using a qualified distribution is sold within three years, the previously untaxed amount would generally become taxable in the year of the sale. The bill provides exceptions for circumstances including death, divorce, changes in family size, job loss and certain job relocations.
“Unfortunately, years of inflation-driving, economy-crushing Democrat-led policies aren’t helping make it any easier,” said Sen. Scott. “That’s wrong, and it’s why I am fighting every day to deliver real solutions that make housing more affordable for everyday Americans and make the dream of homeownership a reality. Homeownership means stability and economic mobility. This bill will help first-time buyers save faster, and their money go farther to ease the financial barrier to homeownership for families.”
The bill is backed by the Foundation for Government Accountability. Tarren Bragdon, the organization’s president and chief executive officer, said the measure would give families another tool to save and build wealth through homeownership.
“Owning a home is a fundamental part of the American Dream, yet millions are being priced out of homeownership. The American Dream Accounts Act helps reverse that disturbing trend by giving families better tools to save, invest, lay down roots, and build for the future. We’re grateful to Senator Scott for championing policies that expand opportunity and restore the promise of the American Dream,” he said.
If enacted, the legislation would apply to taxable years beginning after Dec. 31, 2026.
