Builders Fly to Washington to Push for Homeownership Tax Credit

Filed in Capitol Hill, Homeownership by on November 14, 2017 3 Comments

More than 50 builders from across the nation are traveling to Washington this week to hold meetings with key House and Senate Republican leaders and urge them to include a homeownership tax credit in tax reform legislation pending in both chambers of Congress.

With tax reform moving rapidly on Capitol Hill, the builder fly-in is meant to highlight a major shortfall in each of the tax relief bills – a lack of a meaningful homeownership tax incentive.

Builders are urging lawmakers to rectify this situation by including a homeownership tax credit.

The House and the Senate bills gut existing housing tax benefits by drastically reducing the number of home owners who can take advantage of mortgage interest and property tax incentives.

The homeownership tax credit would solve this problem. It would help up to 37 million additional home owners who do not currently itemize. Many of them are first-time home buyers or young couples with growing families who really spur the housing market.

NAHB believes the tax credit is sound economic policy and good social policy that would allow more families to achieve a toe hold on the homeownership ladder.

By marginalizing homeownership tax incentives, the Senate and House legislation threatens to reduce home values, act as a tax on existing home owners and force many younger, aspiring home buyers out of high-cost markets.

However, there are differences between the two bills. While NAHB still opposes the current House tax reform legislation, the Senate bill represents a big step forward. Unlike the House bill, the Senate package provides meaningful tax relief for small businesses and keeps the complete Low-Income Housing Tax Credit in place.

At the same time, NAHB believes that both the House and Senate legislation falls short in maintaining an effective homeownership tax incentive. We continue to work with lawmakers to achieve this goal as the legislative process advances.

Learn more at nahb.org/taxreform, and see a visual explanation of the credit below:

tax credit proposal

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Comments (3)

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  1. With reconciliation between the House and Senate tax plans just getting underway, it may be that some form of modified tax credit could appear in the final legislation. Arguably, we’ll end up with some form of compromise on the deductibility of both mortgage interest which will probably be limited to primary residences only, but perhaps at a level above the $500,000 being discussed. It would seem like having this max amount indexed to the conforming limit in both traditional and high-cost areas would make an excellent compromise, but whether or not this can be agreed upon is unclear.

    The future of the deductibility of property taxes seems unclear, but there is a chance that we’ll end up with something between the zero deductibility of one plan and the $10,000 cap of the other. Combining some property tax deduction with a higher cap on the mortgage interest deduction would probably spare the vast majority of homeowners and homebuyers much by way of financial pain.

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