The National Association of Home Builders was out Saturday in NAHB Now with modest support for the tax reform bill that passed in the Senate early that morning. The National Association of Realtors, on the other hand, maintained opposition.
From NAHB Now on Saturday: Senate Republicans early this morning narrowly approved the Tax Cuts and Jobs Act (H.R. 1), legislation that would revamp the nation’s tax code.
While NAHB opposes the House-passed version of H.R. 1, the Senate bill represents a step in the right direction.
Unlike the House bill, the Senate tax reform package would:
- Retain private activity bonds, a key tool for the production of affordable housing;
- Keep the mortgage interest deduction cap at $1 million;
- Retain the mortgage interest deduction for second homes; and
- Exclude the punitive income phase-out proposed by the House as part of changes to the capital gains exemption from the sale of a primary residence.
NAHB was also successful in urging lawmakers to adopt an amendment to the Senate tax reform bill proposed by Sen. Susan Collins (R-Maine) that will allow home owners to deduct up to $10,000 in property taxes.
Moreover, the Senate bill brings more parity in how pass-through businesses and C-corporations are taxed, enabling them to maintain a level playing field with large corporations.
The legislation now goes to a House-Senate conference, where conferees from both parties will hammer out differences between the two bills. NAHB will be urging conferees to adopt most of the provisions in the Senate plan and to support any changes that will allow more families to achieve homeownership and rental housing opportunities.
The Realtors were not supportive: The U.S. Senate today passed tax reform legislation that the National Association of Realtors® believes puts home values at risk and dramatically undercuts the incentive to own a home.
NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, offered strong concerns over the bill and said Realtors® will continue to work with members of the House and Senate as the process moves forward into a conference committee.
National Association of Realtors 2018 President Elizabeth Mendenhall”The tax incentives to own a home are baked into the overall value of homes in every state and territory across the country. When those incentives are nullified in the way this bill provides, our estimates show that home values stand to fall by an average of more than 10 percent, and even greater in high-cost areas.
“Realtors® support tax cuts when done in a fiscally responsible way; while there are some winners in this legislation, millions of middle-class homeowners would see very limited benefits, and many will even see a tax increase. In exchange for that, they’ll also see much or all of their home equity evaporate as $1.5 trillion is added to the national debt and piled onto the backs of their children and grandchildren.
“That’s a poor foot to put forward, but this isn’t the end of the road. Realtors® will continue to advocate for homeownership and hope members of the House and Senate will listen to the concerns of America’s 75 million homeowners as the tax reform discussion continues.”
