Individual Housing Account Act of 1981

Individual Housing Account Act of 1981 - Amends the Internal Revenue Code to allow an income tax deduction for cash contributions to a savings account created or organized for the benefit of the taxpayer (or the taxpayer and spouse if married) for the exclusive purpose of purchasing the taxpayer's first principal residence. Limits the maximum annual deduction to $2,500 ($5,000 for a married couple), with a maximum lifetime deduction of $25,000. Provides for a reduced maximum deduction in the case of individuals with income greater than $30,000.

Exempts such accounts from income taxation. Excludes distributions from such account from gross income so long as they are used exclusively for the purchase of a first principal residence. Imposes a ten percent surtax on distributions from individual housing account which are not used for the purchase of a principal residence.