A bill to amend the Internal Revenue Code of 1954 to provide for the establishment of, and the credit against tax for contributions to, individual housing accounts.

Amends the Internal Revenue Code to allow individuals who have never owned a principal residence an income tax credit for 25 percent of amounts contributed to an individual housing account. Limits the amount of such credit to $1,500 for any taxable year ($3,000 for joint returns). Requires contributions made to an individual housing account to remain in such account for at least 12 months.

Sets forth requirements for the establishment of an individual housing account. Imposes penalties for distributions made from an individual housing account which are not used in connection with the purchase of a principal residence.

Exempts interest earned on an individual housing account from income taxation. Requires the trustee of an individual housing account to make such reports regarding the maintenance of an individual housing account as the Secretary of the Treasury may require. Prohibits contributions to an individual housing account in excess of prescribed limits and imposes a tax on such excess contributions equal to the tax on excess contributions to an individual retirement account.