diff --git a/src/mir/builder/vars/free_vars.rs b/src/mir/builder/vars/free_vars.rs
index 8d1bc419..fa3d6d51 100644
--- a/src/mir/builder/vars/free_vars.rs
+++ b/src/mir/builder/vars/free_vars.rs
@@ -1,157 +1,293 @@
 use crate::ast::ASTNode;
 use std::collections::HashSet;
 
-/// Collect free variables used in `node` into `used`, excluding names present in `locals`.
-/// `locals` is updated as new local declarations are encountered.
 #[allow(dead_code)]
 pub(in crate::mir::builder) fn collect_free_vars(
     node: &ASTNode,
     used: &mut HashSet<String>,
     locals: &mut HashSet<String>,
 ) {
-    match node {
-        ASTNode::Variable { name, .. } => {
-            if name != "me" && name != "this" && !locals.contains(name) {
-                used.insert(name.clone());
-            }
+    let mut collector = FreeVarCollector::new(used, locals);
+    collector.walk(node, true);
+    *locals = collector.take_root_locals();
+}
+
+struct FreeVarCollector<'a> {
+    used: &'a mut HashSet<String>,
+    root_locals: HashSet<String>,
+    scope_stack: Vec<HashSet<String>>,
+}
+
+impl<'a> FreeVarCollector<'a> {
+    fn new(used: &'a mut HashSet<String>, root_locals: &HashSet<String>) -> Self {
+        Self {
+            used,
+            root_locals: root_locals.clone(),
+            scope_stack: vec![root_locals.clone()],
         }
-        ASTNode::Local { variables, .. } => {
-            for v in variables {
-                locals.insert(v.clone());
-            }
+    }
+
+    fn take_root_locals(self) -> HashSet<String> {
+        self.root_locals
+    }
+
+    fn is_declared(&self, name: &str) -> bool {
+        self.scope_stack.iter().rev().any(|s| s.contains(name))
+    }
+
+    fn declare_in_current_scope(&mut self, name: &str) {
+        if let Some(scope) = self.scope_stack.last_mut() {
+            scope.insert(name.to_string());
         }
-        ASTNode::Assignment { target, value, .. } => {
-            collect_free_vars(target, used, locals);
-            collect_free_vars(value, used, locals);
+        if self.scope_stack.len() == 1 {
+            self.root_locals.insert(name.to_string());
         }
-        // Phase 152-A: Grouped assignment expression
-        ASTNode::GroupedAssignmentExpr { rhs, .. } => {
-            collect_free_vars(rhs, used, locals);
+    }
+
+    fn with_child_scope(&mut self, f: impl FnOnce(&mut Self)) {
+        self.scope_stack.push(HashSet::new());
+        f(self);
+        self.scope_stack.pop();
+    }
+
+    fn walk_block(&mut self, statements: &[ASTNode]) {
+        for st in statements {
+            self.walk(st, false);
         }
-        ASTNode::BinaryOp { left, right, .. } => {
-            collect_free_vars(left, used, locals);
-            collect_free_vars(right, used, locals);
-        }
-        ASTNode::UnaryOp { operand, .. } => {
-            collect_free_vars(operand, used, locals);
-        }
-        ASTNode::MethodCall {
-            object, arguments, ..
-        } => {
-            collect_free_vars(object, used, locals);
-            for a in arguments {
-                collect_free_vars(a, used, locals);
-            }
-        }
-        ASTNode::FunctionCall { arguments, .. } => {
-            for a in arguments {
-                collect_free_vars(a, used, locals);
-            }
-        }
-        ASTNode::Call {
-            callee, arguments, ..
-        } => {
-            collect_free_vars(callee, used, locals);
-            for a in arguments {
-                collect_free_vars(a, used, locals);
-            }
-        }
-        ASTNode::FieldAccess { object, .. } => {
-            collect_free_vars(object, used, locals);
-        }
-        ASTNode::Index { target, index, .. } => {
-            collect_free_vars(target, used, locals);
-            collect_free_vars(index, used, locals);
-        }
-        ASTNode::New { arguments, .. } => {
-            for a in arguments {
-                collect_free_vars(a, used, locals);
-            }
-        }
-        ASTNode::If {
-            condition,
-            then_body,
-            else_body,
-            ..
-        } => {
-            collect_free_vars(condition, used, locals);
-            for st in then_body {
-                collect_free_vars(st, used, locals);
-            }
-            if let Some(eb) = else_body {
-                for st in eb {
-                    collect_free_vars(st, used, locals);
+    }
+
+    fn walk(&mut self, node: &ASTNode, is_root: bool) {
+        match node {
+            ASTNode::Variable { name, .. } => {
+                if name != "me" && name != "this" && !self.is_declared(name) {
+                    self.used.insert(name.clone());
                 }
             }
-        }
-        ASTNode::Loop {
-            condition, body, ..
-        } => {
-            collect_free_vars(condition, used, locals);
-            for st in body {
-                collect_free_vars(st, used, locals);
-            }
-        }
-        ASTNode::TryCatch {
-            try_body,
-            catch_clauses,
-            finally_body,
-            ..
-        } => {
-            for st in try_body {
-                collect_free_vars(st, used, locals);
-            }
-            for c in catch_clauses {
-                for st in &c.body {
-                    collect_free_vars(st, used, locals);
+            ASTNode::Local {
+                variables,
+                initial_values,
+                ..
+            } => {
+                for init in initial_values {
+                    if let Some(expr) = init {
+                        self.walk(expr, false);
+                    }
+                }
+                for v in variables {
+                    self.declare_in_current_scope(v);
                 }
             }
-            if let Some(fb) = finally_body {
-                for st in fb {
-                    collect_free_vars(st, used, locals);
+            ASTNode::Outbox {
+                variables,
+                initial_values,
+                ..
+            } => {
+                for init in initial_values {
+                    if let Some(expr) = init {
+                        self.walk(expr, false);
+                    }
+                }
+                for v in variables {
+                    self.declare_in_current_scope(v);
                 }
             }
-        }
-        ASTNode::Throw { expression, .. } => {
-            collect_free_vars(expression, used, locals);
-        }
-        ASTNode::Print { expression, .. } => {
-            collect_free_vars(expression, used, locals);
-        }
-        ASTNode::Return { value, .. } => {
-            if let Some(v) = value {
-                collect_free_vars(v, used, locals);
+            ASTNode::Assignment { target, value, .. } => {
+                self.walk(target, false);
+                self.walk(value, false);
             }
-        }
-        ASTNode::AwaitExpression { expression, .. } => {
-            collect_free_vars(expression, used, locals);
-        }
-        ASTNode::MatchExpr {
-            scrutinee,
-            arms,
-            else_expr,
-            ..
-        } => {
-            collect_free_vars(scrutinee, used, locals);
-            for (_, e) in arms {
-                collect_free_vars(e, used, locals);
+            ASTNode::GroupedAssignmentExpr { rhs, .. } => {
+                self.walk(rhs, false);
             }
-            collect_free_vars(else_expr, used, locals);
-        }
-        ASTNode::Program { statements, .. } => {
-            for st in statements {
-                collect_free_vars(st, used, locals);
+            ASTNode::BinaryOp { left, right, .. } => {
+                self.walk(left, false);
+                self.walk(right, false);
             }
-        }
-        ASTNode::FunctionDeclaration { params, body, .. } => {
-            let mut inner = locals.clone();
-            for p in params {
-                inner.insert(p.clone());
+            ASTNode::UnaryOp { operand, .. } => {
+                self.walk(operand, false);
             }
-            for st in body {
-                collect_free_vars(st, used, &mut inner);
+            ASTNode::MethodCall {
+                object, arguments, ..
+            } => {
+                self.walk(object, false);
+                for a in arguments {
+                    self.walk(a, false);
+                }
             }
+            ASTNode::FunctionCall { arguments, .. } => {
+                for a in arguments {
+                    self.walk(a, false);
+                }
+            }
+            ASTNode::Call {
+                callee, arguments, ..
+            } => {
+                self.walk(callee, false);
+                for a in arguments {
+                    self.walk(a, false);
+                }
+            }
+            ASTNode::FieldAccess { object, .. } => {
+                self.walk(object, false);
+            }
+            ASTNode::Index { target, index, .. } => {
+                self.walk(target, false);
+                self.walk(index, false);
+            }
+            ASTNode::New { arguments, .. } => {
+                for a in arguments {
+                    self.walk(a, false);
+                }
+            }
+            ASTNode::If {
+                condition,
+                then_body,
+                else_body,
+                ..
+            } => {
+                self.walk(condition, false);
+                self.with_child_scope(|this| this.walk_block(then_body));
+                if let Some(eb) = else_body {
+                    self.with_child_scope(|this| this.walk_block(eb));
+                }
+            }
+            ASTNode::Loop {
+                condition, body, ..
+            } => {
+                self.walk(condition, false);
+                self.with_child_scope(|this| this.walk_block(body));
+            }
+            ASTNode::TryCatch {
+                try_body,
+                catch_clauses,
+                finally_body,
+                ..
+            } => {
+                self.with_child_scope(|this| this.walk_block(try_body));
+                for c in catch_clauses {
+                    self.with_child_scope(|this| this.walk_block(&c.body));
+                }
+                if let Some(fb) = finally_body {
+                    self.with_child_scope(|this| this.walk_block(fb));
+                }
+            }
+            ASTNode::Throw { expression, .. } => {
+                self.walk(expression, false);
+            }
+            ASTNode::Print { expression, .. } => {
+                self.walk(expression, false);
+            }
+            ASTNode::Return { value, .. } => {
+                if let Some(v) = value {
+                    self.walk(v, false);
+                }
+            }
+            ASTNode::AwaitExpression { expression, .. } => {
+                self.walk(expression, false);
+            }
+            ASTNode::MatchExpr {
+                scrutinee,
+                arms,
+                else_expr,
+                ..
+            } => {
+                self.walk(scrutinee, false);
+                for (_, e) in arms {
+                    self.walk(e, false);
+                }
+                self.walk(else_expr, false);
+            }
+            ASTNode::Program { statements, .. } => {
+                if is_root {
+                    self.walk_block(statements);
+                } else {
+                    self.with_child_scope(|this| this.walk_block(statements));
+                }
+            }
+            ASTNode::ScopeBox { body, .. } => {
+                if is_root {
+                    self.walk_block(body);
+                } else {
+                    self.with_child_scope(|this| this.walk_block(body));
+                }
+            }
+            ASTNode::FunctionDeclaration { params, body, .. } => {
+                self.with_child_scope(|this| {
+                    for p in params {
+                        this.declare_in_current_scope(p);
+                    }
+                    this.walk_block(body);
+                });
+            }
+            _ => {}
         }
-        _ => {}
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use super::collect_free_vars;
+    use crate::ast::ASTNode;
+    use crate::ast::Span;
+    use std::collections::HashSet;
+
+    fn var(name: &str) -> ASTNode {
+        ASTNode::Variable {
+            name: name.to_string(),
+            span: Span::unknown(),
+        }
+    }
+
+    fn local(name: &str) -> ASTNode {
+        ASTNode::Local {
+            variables: vec![name.to_string()],
+            initial_values: vec![None],
+            span: Span::unknown(),
+        }
+    }
+
+    fn block(statements: Vec<ASTNode>) -> ASTNode {
+        ASTNode::Program {
+            statements,
+            span: Span::unknown(),
+        }
+    }
+
+    fn scopebox(statements: Vec<ASTNode>) -> ASTNode {
+        ASTNode::ScopeBox {
+            body: statements,
+            span: Span::unknown(),
+        }
+    }
+
+    #[test]
+    fn block_local_does_not_leak_to_outer_scope() {
+        let node = block(vec![block(vec![local("y")]), var("y")]);
+        let mut used = HashSet::new();
+        let mut locals = HashSet::new();
+        collect_free_vars(&node, &mut used, &mut locals);
+        assert!(used.contains("y"));
+    }
+
+    #[test]
+    fn scopebox_local_does_not_leak_to_outer_scope() {
+        let node = block(vec![scopebox(vec![local("y")]), var("y")]);
+        let mut used = HashSet::new();
+        let mut locals = HashSet::new();
+        collect_free_vars(&node, &mut used, &mut locals);
+        assert!(used.contains("y"));
+    }
+
+    #[test]
+    fn local_initializer_is_counted_as_read_before_declare() {
+        let node = block(vec![ASTNode::Local {
+            variables: vec!["x".to_string()],
+            initial_values: vec![Some(Box::new(var("y")))],
+            span: Span::unknown(),
+        }]);
+        let mut used = HashSet::new();
+        let mut locals = HashSet::new();
+        collect_free_vars(&node, &mut used, &mut locals);
+        assert!(used.contains("y"));
+        assert!(locals.contains("x"));
     }
 }