I 

117TH CONGRESS 

1ST SESSION H. R. 2863 

To amend the Internal Revenue Code to provide for a first-time homebuyer 

credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 28, 2021 

Mr. BLUMENAUER (for himself and Mr. PANETTA) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code to provide for a firsttime homebuyer credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘First-Time Homebuyer 

5 Act of 2021’’. 

6 SEC. 2. FIRST-TIME HOMEBUYER REFUNDABLE TAX CRED7 IT. 

8 (a) IN GENERAL.—Section 36 of the Internal Rev9 enue Code of 1986 is amended to read as follows: 


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1 ‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual who is a first-time homebuyer of a principal resi4 dence in the United States during a taxable year, there 

5 shall be allowed as a credit against the tax imposed by 

6 this subtitle for such taxable year an amount equal to 10 

7 percent of the purchase price of the residence. 

8 ‘‘(b) LIMITATIONS.— 

9 ‘‘(1) DOLLAR LIMITATION.— 

10 ‘‘(A) IN GENERAL.—Except as otherwise 

11 provided in this paragraph, the credit allowed 

12 under subsection (a) shall not exceed $15,000. 

13 ‘‘(B) MARRIED INDIVIDUALS FILING SEPA14 RATELY.—In the case of a married individual 

15 filing a separate return, subparagraph (A) shall 

16 be applied by substituting ‘$7,500’ for 

17 ‘$15,000’. 

18 ‘‘(C) OTHER INDIVIDUALS.—If two or 

19 more individuals who are not married purchase 

20 a principal residence, the amount of the credit 

21 allowed under subsection (a) shall be allocated 

22 among such individuals in such manner as the 

23 Secretary may prescribe, except that the total 

24 amount of the credits allowed to all such indi25 viduals shall not exceed $15,000. 


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1 ‘‘(2) LIMITATION BASED ON AREA MEDIAN IN2 COME.— 

3 ‘‘(A) IN GENERAL.—No credit shall be al4 lowed under subsection (a) to a taxpayer with 

5 a modified adjusted gross income that is great6 er than the applicable amount. 

7 ‘‘(B) MODIFIED ADJUSTED GROSS IN8 COME.—For purposes of subparagraph (A), the 

9 term ‘modified adjusted gross income’ means 

10 the adjusted gross income of the taxpayer for 

11 the taxable year increased by any amount ex12 cluded from gross income under section 911, 

13 931, or 933. 

14 ‘‘(C) APPLICABLE AMOUNT.— 

15 ‘‘(i) IN GENERAL.—For purposes of 

16 subparagraph (A), the term ‘applicable 

17 amount’ means an amount that is equal to 

18 160 percent of the Area Median Income 

19 set by the Secretary of Housing and Urban 

20 Development with respect to— 

21 ‘‘(I) the area in which the prin22 cipal residence is located, 

23 ‘‘(II) the size of the household of 

24 the taxpayer, and 


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1 ‘‘(III) the calendar year in which 

2 the principal residence is purchased. 

3 ‘‘(ii) REGULATIONS AND GUIDANCE.— 

4 The Secretary, after consultation with the 

5 Secretary of Housing and Urban Develop6 ment, shall promulgate such regulations 

7 and guidance as are necessary to carry out 

8 the purposes of this subparagraph. 

9 ‘‘(3) LIMITATION BASED ON AREA MEDIAN PUR10 CHASE PRICE.— 

11 ‘‘(A) IN GENERAL.—The amount allowable 

12 as a credit under subsection (a) (determined 

13 without regard to this paragraph) shall be re14 duced (but not below zero) by the amount 

15 which bears the same ratio to the amount which 

16 is so allowable as— 

17 ‘‘(i) the excess (if any) of— 

18 ‘‘(I) the purchase price of the 

19 primary residence, over 

20 ‘‘(II) the amount which is equal 

21 to 110 percent of the area median 

22 purchase price, bears to 

23 ‘‘(ii) the amount which is equal to 125 

24 percent of the area median purchase price. 


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1 ‘‘(B) AREA MEDIAN PURCHASE PRICE.— 

2 For purposes of this paragraph, the term ‘area 

3 median purchase price’ means the average pur4 chase price for a home in both the area and the 

5 calendar year in which the purchase of the pri6 mary residence takes place. 

7 ‘‘(C) REGULATIONS AND GUIDANCE.—The 

8 Secretary, after consultation with the Secretary 

9 of Housing and Urban Development, shall pro10 mulgate such regulations and guidance as are 

11 necessary to carry out the purposes of this sub12 paragraph, including setting purchase price lim13 itations for the credit under subsection (a) 

14 based on area median income. 

15 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

16 any taxable year beginning in a calendar year after 

17 2021, each of the dollar amounts in paragraph (1) 

18 shall be increased by an amount equal to— 

19 ‘‘(A) such dollar amount, multiplied by 

20 ‘‘(B) the cost-of-living adjustment deter21 mined under section 1(f)(3) for the calendar 

22 year in which the taxable year begins, deter23 mined by substituting ‘calendar year 2020’ for 

24 ‘calendar year 2016’ in subparagraph (A)(ii) 

25 thereof. 


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1 Any increase determined under the preceding sen2 tence shall be rounded to the nearest multiple of 

3 $100. 

4 ‘‘(5) AGE LIMITATION.—No credit shall be al5 lowed under subsection (a) with respect to the pur6 chase of any residence unless the taxpayer has at7 tained age 18 as of the date of such purchase. In 

8 the case of any taxpayer who is married (within the 

9 meaning of section 7703), the taxpayer shall be 

10 treated as meeting the age requirement of the pre11 ceding sentence if the taxpayer or the taxpayer’s 

12 spouse meets such age requirement. 

13 ‘‘(c) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) FIRST-TIME HOMEBUYER.—The term 

15 ‘first-time homebuyer’ means any individual if such 

16 individual (and if married, such individual’s 

17 spouse)— 

18 ‘‘(A) has no present ownership interest in 

19 any residence during the 3–year period ending 

20 on the date of the purchase of the principal res21 idence to which this section applies, and 

22 ‘‘(B) has not taken the credit in any other 

23 taxable year. 


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1 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin2 cipal residence’ has the same meaning as when used 

3 in section 121. 

4 ‘‘(3) PURCHASE.— 

5 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

6 means any acquisition, but only if— 

7 ‘‘(i) the property is not acquired from 

8 a person related to the person acquiring 

9 such property (or, if married, such individ10 ual’s spouse), and 

11 ‘‘(ii) the basis of the property in the 

12 hands of the person acquiring such prop13 erty is not determined— 

14 ‘‘(I) in whole or in part by ref15 erence to the adjusted basis of such 

16 property in the hands of the person 

17 from whom acquired, or 

18 ‘‘(II) under section 1014(a) (re19 lating to property acquired from a de20 cedent). 

21 ‘‘(B) CONSTRUCTION.—A residence which 

22 is constructed by the taxpayer shall be treated 

23 as purchased by the taxpayer on the date the 

24 taxpayer first occupies such residence. 


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1 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

2 price’ means the adjusted basis of the principal resi3 dence on the date such residence is purchased. 

4 ‘‘(5) RELATED PERSONS.—A person shall be 

5 treated as related to another person if the relation6 ship between such persons would result in the dis7 allowance of losses under section 267 or 707(b). 

8 ‘‘(d) EXCEPTIONS.—No credit under subsection (a) 

9 shall be allowed to any taxpayer for any taxable year with 

10 respect to the purchase of a residence if— 

11 ‘‘(1) the taxpayer disposes of such residence (or 

12 such residence ceases to be the principal residence of 

13 the taxpayer (and, if married, the taxpayer’s 

14 spouse)) before the close of such taxable year, 

15 ‘‘(2) a deduction under section 151 with respect 

16 to such taxpayer is allowable to another taxpayer for 

17 such taxable year, or 

18 ‘‘(3) the taxpayer fails to attach to the return 

19 of tax for such taxable year a properly executed copy 

20 of the settlement statement used to complete such 

21 purchase. 

22 ‘‘(e) REPORTING.—If the Secretary requires informa23 tion reporting under section 6045 by a person described 

24 in subsection (e)(2) thereof to verify the eligibility of taxVerDate Sep 11 2014 05:26 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2863.IH H2863

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1 payers for the credit allowable by this section, the excep2 tion provided by section 6045(e) shall not apply. 

3 ‘‘(f) RECAPTURE OF CREDIT.— 

4 ‘‘(1) IN GENERAL.—Except as otherwise pro5 vided in this subsection, if, during any taxable year 

6 before the close of the recapture period, a taxpayer 

7 disposes of the principal residence with respect to 

8 which a credit was allowed under subsection (a) (or 

9 such residence ceases to be the principal residence of 

10 the taxpayer), the tax imposed by this chapter for 

11 such taxable year shall be increased by the recover12 able amount determined in paragraph (2). 

13 ‘‘(2) RECOVERABLE AMOUNT.—For purposes of 

14 paragraph (1), the recoverable amount is the prod15 uct of— 

16 ‘‘(A) 25 percent of the amount of the cred17 it allowed under subsection (a), multiplied by 

18 ‘‘(B) the number of taxable years remain19 ing in the recapture period as of the beginning 

20 of the taxable year in which the taxpayer dis21 poses of the principal residence. 

22 ‘‘(3) LIMITATION BASED ON GAIN.—In the case 

23 of the sale of the principal residence to a person who 

24 is not related to the taxpayer, the increase in tax de25 termined under paragraph (1) shall not exceed the 


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1 amount of gain (if any) on such sale. Solely for pur2 poses of the preceding sentence, the adjusted basis 

3 of such residence shall be reduced by the amount of 

4 the credit allowed under subsection (a). 

5 ‘‘(4) EXCEPTIONS.— 

6 ‘‘(A) DEATH OF A TAXPAYER.—Paragraph 

7 (1) shall not apply to any taxable year ending 

8 after the date of the taxpayer’s death. 

9 ‘‘(B) INVOLUNTARY CONVERSION.—Para10 graph (1) shall not apply in the case of a resi11 dence which is compulsorily or involuntarily 

12 converted (within the meaning of section 

13 1033(a)) if the taxpayer acquires a new prin14 cipal residence during the 2-year period begin15 ning on the date of the disposition or cessation 

16 referred to in paragraph (1). Paragraph (1) 

17 shall apply to such new principal residence dur18 ing the recapture period in the same manner as 

19 if such new principal residence were the con20 verted residence. 

21 ‘‘(C) TRANSFERS BETWEEN SPOUSES OR

22 INCIDENT TO DIVORCE.—In the case of a trans23 fer of a residence to which section 1041(a) ap24 plies— 


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1 ‘‘(i) paragraph (1) shall not apply to 

2 such transfer, and 

3 ‘‘(ii) in the case of taxable years end4 ing after such transfer, paragraph (1) shall 

5 apply to the transferee in the same manner 

6 as if such transferee were the transferor 

7 (and shall not apply to the transferor). 

8 ‘‘(D) SPECIAL RULE FOR MEMBERS OF

9 THE ARMED FORCES, ETC.— 

10 ‘‘(i) IN GENERAL.—In the case of the 

11 disposition of a principal residence by an 

12 individual (or a cessation referred to in 

13 paragraph (1)) after December 31, 2019, 

14 in connection with Government orders re15 ceived by such individual, or such individ16 ual’s spouse, for qualified official extended 

17 duty service, paragraph (1) and subsection 

18 (d)(2) shall not apply to such disposition 

19 (or cessation). 

20 ‘‘(ii) QUALIFIED OFFICIAL EXTENDED

21 DUTY SERVICE.—For purposes of this sec22 tion, the term ‘qualified official extended 

23 duty service’ means service on qualified of24 ficial extended duty as— 


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1 ‘‘(I) a member of the uniformed 

2 services, 

3 ‘‘(II) a member of the Foreign 

4 Service of the United States, or 

5 ‘‘(III) an employee of the intel6 ligence community. 

7 ‘‘(iii) DEFINITIONS.—Any term used 

8 in this subparagraph which is also used in 

9 paragraph (9) of section 121(d) shall have 

10 the same meaning as when used in such 

11 paragraph. 

12 ‘‘(E) DISPOSITION OF RESIDENCE IN CON13 NECTION WITH CHANGE OF EMPLOYMENT.—In 

14 the case of the disposition of a principal resi15 dence by an individual (or a cessation referred 

16 to in paragraph (1)) after December 31, 2019 

17 in connection with a change of employment 

18 which meets the conditions described in section 

19 217(c), paragraph (1) shall not apply to such 

20 disposition (or cessation). 

21 ‘‘(5) JOINT RETURNS.—In the case of a credit 

22 allowed under subsection (a) with respect to a joint 

23 return, half of such credit shall be treated as having 

24 been allowed to each individual filing such return for 

25 purposes of this subsection. 


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1 ‘‘(6) RETURN REQUIREMENT.—If the tax im2 posed by this chapter for the taxable year is in3 creased under this subsection, the taxpayer shall, 

4 notwithstanding section 6012, be required to file a 

5 return with respect to the taxes imposed under this 

6 subtitle. 

7 ‘‘(7) RECAPTURE PERIOD.—For purposes of 

8 this subsection, the term ‘recapture period’ means 

9 the 4 taxable years beginning with the taxable year 

10 in which the purchase of the principal residence for 

11 which a credit is allowed under subsection (a) was 

12 made. 

13 ‘‘(g) ELECTION TO TREAT PURCHASE IN PRIOR

14 YEAR.—In the case of a purchase of a principal residence 

15 after December 31, 2020, a taxpayer may elect to treat 

16 such purchase as made on December 31 of the calendar 

17 year preceding such purchase for purposes of this section 

18 (other than subsections (b)(4), (c), and (h)). 

19 ‘‘(h) APPLICATION OF SECTION.—This section shall 

20 only apply to a principal residence purchased by the tax21 payer on or after December 31, 2020.’’. 

22 (b) CERTAIN ERRORS WITH RESPECT TO FIRST23 TIME HOMEBUYER TAX CREDIT TREATED AS MATHE24 MATICAL OR CLERICAL ERRORS.—Paragraph (2) of sec25 tion 6213(g) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘and’’ at the end of subparagraph 

2 (P), by striking the period at the end of subparagraph (Q) 

3 and inserting ‘‘, and’’, and by inserting after subpara4 graph (Q) the following new subparagraph: 

5 ‘‘(R) an entry on a return claiming the 

6 credit under section 36 if— 

7 ‘‘(i) the Secretary obtains information 

8 from the person issuing the TIN of the 

9 taxpayer that indicates that the taxpayer 

10 does not meet the age requirement of sec11 tion 36(b)(4), 

12 ‘‘(ii) information provided to the Sec13 retary by the taxpayer on an income tax 

14 return for at least one of the 2 preceding 

15 taxable years is inconsistent with eligibility 

16 for such credit, or 

17 ‘‘(iii) the taxpayer fails to attach to 

18 the return the form described in section 

19 36(d)(3).’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply with respect to taxable years begin22 ning after December 31, 2020. 

Æ 


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