HB1211 • 2026

Income tax, state; first-time homebuyer tax credit.

<p class=ldtitle>A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15, relating to individual income tax; first-time homebuyer tax credit.</p>

Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Sewell
Last action: 2026-02-18
Official status: Failed
Effective date: Not listed

Plain English Breakdown

The official source does not specify how many people will qualify for the tax credit or if there will be enough funds to cover all eligible buyers.

First-Time Homebuyer Tax Credit

This law creates a one-time tax credit for first-time homebuyers in Virginia, providing up to $5,000 off their taxes when buying a principal residence between January 1, 2026 and December 31, 2030.

What This Bill Does

Creates a one-time nonrefundable tax credit of up to $5,000 for first-time homebuyers purchasing a principal residence from January 1, 2026 through December 31, 2030.
Limits the total amount of credits given each year to $10 million and allocates them on a first-come, first-served basis.
Requires repayment if the home is sold or no longer used as the main residence within three years unless due to natural disaster or military relocation.
Allows any leftover credit amount to be carried over for up to five more years until fully used.

Who It Names or Affects

First-time homebuyers who meet income and residency requirements
The Virginia Department of Taxation, which will manage the tax credits

Terms To Know

First-time homebuyer: An individual or married couple who have not owned a principal residence in the past three years.
Principal residence: The main house where someone lives and uses as their permanent home.

Limits and Unknowns

The total amount of tax credits available each year is limited to $10 million.
It's not clear how many people will qualify for the credit or if there will be enough funds to cover all eligible buyers.

Bill History

2026-02-18 House
Left in Committee Education
2026-02-18 House
Left in Finance
2026-02-02 Subcommittee #1
Subcommittee recommends laying on the table (7-Y 3-N)
2026-01-28 House
Fiscal Impact statement From TAX (1/28/2026 9:17 am)
2026-01-14 House
Prefiled and ordered printed; Offered 01-14-2026 26105125D
2026-01-14 Finance
Referred to Committee on Finance

Official Summary Text

Individual income tax; first-time homebuyer tax credit.
Creates a one-time, nonrefundable individual income tax credit in taxable years 2026 through 2030 for the purchase of a principal residence by a first-time homebuyer, as such terms are defined in the bill, in an amount equal to $5,000. The bill requires that any credits be repaid if the principal residence is sold or no longer serves as the first-time homebuyer's principal residence within three years from the purchase date of such property.

Current Bill Text

Read the full stored bill text

A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered
58.1-339.15
, relating to individual income tax; first-time homebuyer tax credit.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered
58.1-339.15
as follows:

§
58.1-339.15
.
F
irst-time homebuyer tax credit.

A. As used in this section
:

"
F
irst-time homebuyer" means
an individual
or married individuals filing jointly

(i) who
ha
ve
had no ownership
interest
in a principal residence during the
preceding

three
-year period ending on the date of purchase of
the residential

real
property
detailed on the purchase agreement

and (ii)
who ha
ve
an annual household income
in the
most recent
taxable year
that does not exceed
the greater of (a)
$100,000
or (b)
120 percent of

the
median
annual household income
for the locality in which such residential real property is situated according
to
the most recent data available from the U.S
.
Census Bureau
.

"Principal residence" means the resid
ential real property
an owner occupies as his permanent home and uses as his principal dwelling place.

B
.

For taxable years beginning on and after January 1,
2026
, but before January 1,
2031
,
a first-time homebuyer
who purchases a principal residence
shall be allowed a
one-time
nonrefundable credit
against the tax levied pursuant to §
58.1-320
in an amount
equal to
$5,000
.
The aggregate amount of credits allowable under this section shall not exceed $10 million per taxable year. Credits shall be allocated by the Department on a first-come, first-served basis.

C. The amount of the credit that may be claimed in any single taxable year shall not exceed the taxpayer's liability for taxes imposed by this chapter for that taxable year. If the amount of the credit allowed under this section exceeds the taxpayer's tax liability for the taxable year in which the

purchase of the
principal residence
occurred
, the amount that exceeds the tax liability may be carried over for credit against the income taxes of the taxpayer in the next
five
taxable years or until the total amount of the tax credit has been taken, whichever is sooner.

D.
Any credit
amount
claimed pursuant to this section shall be repaid to
the Commonwealth in the event that the
principal residence
purchased by the first-time homebuyer for which
such credit was claimed
is sold
or no longer
serves as the first-time homebuyer's principal residence
within three years from the
purchase date
of such property
.
Repayment pursuant to this subsection shall not be required if
the principal residence
is
sold
or no longer serves as the first-time homebuyer's principal residence as a result of

(i)
a natural disaster or other act of
G
od
that made such residential real property
uninhabitable
or (ii) a military relocation
.

E
. The Tax Commissioner shall develop guidelines for claiming the credit
and for any repayment requirements
provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§
2.2-4000
et seq.).