(a) In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 36B the following new section:

36C. Qualified home acquisition expenses

(a) In general

In the case of an individual who sells their principal residence to a first-time homebuyer during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to the lesser of—

(1)

the amount paid by the taxpayer for the qualified home acquisition expenses of such first-time homebuyer with respect to such principal residence, or

(2)

the amount by which the tax liability of the taxpayer would decrease if the taxpayer did not have any gain from the sale of such principal residence included in the taxpayer’s gross income.

(b) Definitions

For purposes of this section—

(1) First-time homebuyer

The term first-time homebuyer means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 2-year period ending on the date of the sale of the principal residence to which subsection (a) applies.

(2) Principal residence

The term principal residence has the same meaning as when used in section 121.

(3) Qualified home acquisition expenses

The term qualified home acquisition expenses means the costs of acquiring a residence, including any down payment, inspection costs, and closing costs.

(c) Regulations

The Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section.

(b) Conforming amendments

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2026.