SB747 • 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: Pillion
Last action: 2026-01-28
Official status: Continued
Effective date: Not listed

Plain English Breakdown

The exact number of individuals who will qualify and benefit is uncertain as it depends on future income data and home purchases.

First-Time Homebuyer Tax Credit

This law creates a one-time, nonrefundable tax credit of $5,000 for first-time homebuyers who purchase their principal residence in Virginia between January 1, 2026 and December 31, 2030.

What This Bill Does

Creates a one-time, nonrefundable tax credit of $5,000 for first-time homebuyers.
Limits the total amount of credits to $10 million per year.
Requires repayment if the home is sold or no longer used as a principal residence within three years unless due to natural disaster or military relocation.
Allows carryover of unused credit to future tax years up to five years.

Who It Names or Affects

First-time homebuyers who meet income and ownership requirements.
The Virginia Department of Taxation, which will manage the program.

Terms To Know

First-Time Homebuyer: An individual or married couple with no ownership interest in a principal residence during the three years before purchasing their home and meeting income limits.
Principal Residence: The main home where an owner lives permanently as their primary dwelling place.

Limits and Unknowns

The credit is only available for purchases made between January 1, 2026 and December 31, 2030.
It's unclear how many people will qualify or benefit from the tax credit.

Bill History

2026-01-28 Finance and Appropriations
Continued to 2027 in Finance and Appropriations (10-Y 4-N)
2026-01-26 Senate
Fiscal Impact statement From TAX (1/26/2026 11:04 pm)
2026-01-19 Senate
Presented and ordered printed 26105180D
2026-01-19 Finance and Appropriations
Referred to Committee on Finance and Appropriations

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.).