U.S. Senator Rick Scott (R-FL) has introduced a new piece of legislation to help first-time homebuyers offset soaring home prices by creating dedicated, tax-advantaged savings accounts.
The bill, titled the American Dream Accounts Act of 2026, proposes a system similar to a Roth IRA. Under the plan, prospective buyers could build up funds specifically for down payments and closing costs without facing federal taxes on the account’s growth.
The bill sets clear guidelines on how these accounts would operate. Any U.S. citizen looking to purchase their first home could contribute up to $7,500 annually. For individuals aged 35 and older, a catch-up provision raises that yearly limit to $10,000. Total lifetime contributions into the accounts are capped at $250,000, and the maximum tax-free withdrawal for a home purchase is set at $500,000—or $250,000 if individuals buy a property jointly.
To prevent real estate speculation or quick “house flipping” using tax-sheltered money, the bill mandates that the purchased property must serve as a primary residence for at least three years. If the home is sold before that three-year mark, the withdrawn funds will be retroactively taxed as gross income in the year of the sale. The legislation outlines specific exceptions to this rule, including the death of the taxpayer or spouse, changes in marital status or dependents, job termination, or an employment relocation of 50 miles or more, which includes military orders.
If an account holder decides not to buy a home or has leftover funds, up to $100,000 can be rolled over into a standard Roth IRA or transferred to a family member’s American Dream Account. However, any funds withdrawn for non-qualifying purposes will be subject to standard income tax plus an additional 10% penalty tax.
The proposal has drawn formal endorsements from a large coalition of state and national real estate, banking, and building organizations. These include the National Association of REALTORS (NAR), the National Association of Home Builders (NAHB), the Florida Bankers Association (FBA), the Florida Home Builders Association (FHBA), and the Foundation for Government Accountability (FGA).
Supporters of the bill point to the growing financial hurdles facing buyers trying to enter the modern housing market.
“Recent data show that nearly half of potential homebuyers cannot afford a down payment, and the median age of first-time homebuyers is now 40,” said Shannon McGahn, Executive Vice President and Chief Advocacy Officer of NAR. “The proposed first-time homebuyer savings accounts will help individuals and families save for a down payment and closing costs. This bill would help turn aspiration into action, and turn savings into the foundation of lifelong stability, helping another generation realize the American Dream.”
Industry representatives also noted that high housing costs are beginning to stall broader regional economies. Kathy Kraninger, President and CEO of the FBA, stated that “housing affordability is increasingly an impediment to Florida’s growth,” calling the legislation “a smart, forward-looking solution to expand access to homeownership.”
Bill Owens, Chairman of the NAHB, echoed those sentiments, noting that “accumulating funds for a downpayment is a major barrier for first-time home buyers and this bill would help more hard-working families to achieve the dream of homeownership.”
William Webb, Chair of the FHBA, added that too many families are finding homeownership difficult to achieve. “Senator Rick Scott’s American Dream Accounts Act provides a smart, forward-looking solution that helps future homebuyers build savings for a down payment and create long-term financial stability,” Webb said.
The bill has also received backing from conservative policy groups looking to shift economic trends. Tarren Bragdon, President and CEO of the FGA, tied the legislation to broader congressional goals.
“President Trump and congressional Republicans are working tirelessly to reverse the Biden-era affordability crisis and restore Americans’ ability to build wealth and achieve financial security,” Bragdon said. “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.”
The bill has been read twice and referred to committee. If passed by Congress, the amendments to the Internal Revenue Code would officially take effect for taxable years beginning after December 31, 2026.
READ: $5.24 A Gallon Near Metro Airport In Michigan Sparks State Price Gouging Probe At BP
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
