Amend the Internal Revenue Code of 1986 to impose an excise tax on the failure of certain hedge funds owning excess single-family residences to dispose of such residences, and for other purposes.

Summary

Creates a new tax on owners who hold “excess” single-family homes and removes two common tax benefits for those same owners: the mortgage interest deduction for acquisition indebtedness and depreciation deductions for single-family residences. The tax and the new limits on deductions apply for taxable years beginning after the bill becomes law and use statutory ownership and definition rules tied to a newly created tax chapter.

• Imposes a new excise tax on certain owners of excess single-family residences, added as a new chapter under Subtitle D of the Internal Revenue Code.
• Denies the mortgage interest deduction for acquisition indebtedness on single-family residences for taxpayers liable under the new excise-tax chapter.
• Denies depreciation deductions for single-family residences for taxpayers liable under the new excise-tax chapter.
• All tax and deduction changes apply to taxable years beginning after enactment.
• Denial rules reference definitions and ownership attribution in the new tax chapter, tying liability and coverage to those cross-referenced provisions.
• Intended to reduce institutional or large-scale ownership of single-family homes by removing tax advantages and adding a penalty tax.
• Administration and enforcement will involve Treasury/IRS rulemaking and taxpayer reporting to identify covered owners.
• Could prompt divestment of excess single-family homes and change incentives for holding rental housing as investments.