A bill to amend the Internal Revenue Code of 1954 to provide for the establishment of, and the deduction of contributions to, housing savings accounts.

Amends the Internal Revenue Code to allow individual taxpayers an income tax deduction for cash and securities contributed 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 such individual's first residence. Limits the aggregate amount deductible by a taxpayer to 15 percent of his adjusted gross income. Limits the dollar amount of such deduction to $1,500 annually ($3,000 in the case of a married couple's joint account), with a maximum lifetime deduction of $15,000 ($30,000 in the case of a married couple's joint account). Provides for annual cost-of-living adjustments to such amounts.

Exempts such individual housing accounts from income taxation. Provides that upon purchase of a principal residence any qualified distributions from such an account used in the purchase shall be included in the beneficiary's income over a ten-year period.

Prescribes tax penalties for the use of housing account distributions which are used for purposes other than the purchase of a first principal residence.

Directs the trustee of an individual housing account to make reports regarding such account to the Secretary of the Treasury as required.

Extends the income tax deduction for contributions to an individual housing account to taxpayers who do not itemize deductions.