Sponsors (2)
The bill aims to shift single‑family homes toward owner‑occupancy and nonprofit stewardship (benefiting buyers and affordable‑housing groups) by restricting tax benefits for many rental owners, but it raises taxes and compliance burdens for those owners and risks reducing private investment and rental supply in some markets.
Prospective homebuyers and sellers of single-family homes (individuals) get a year‑of‑sale interest/depreciation allowance that makes converting rentals to owner‑occupied homes cheaper and quicker.
Qualified nonprofits (CDCs, CHDOs, land banks, CLTs) are exempted from the disallowance rules, making it easier for nonprofits to acquire and preserve affordable single‑family rental housing for low‑income households.
The rules target large-scale private single‑family rental investors (e.g., owners of 50+ properties), which could reduce investor-driven upward pressure on rents and free more homes for owner‑occupancy.
Owners who become disqualified (including many large owners) lose deductible interest and/or depreciation, increasing taxable income and tax bills and creating pressure to raise rents or sell properties.
The rules could reduce private investment and maintenance in small rental housing (fewer purchases, less rehab/new supply), which may shrink rental supply in some markets and push up rents or reduce housing quality.
Aggregation tests (employer/affiliated group rules) and related‑party definitions may expand who is treated as a disqualified owner, unexpectedly capturing individual investors and related entities and broadening the rule’s impact.
Based on analysis of 3 sections of legislative text.
Disallows interest and depreciation deductions for taxpayers who own 50+ single‑family rental properties, with limited exceptions for sales to individuals or qualifying nonprofits.
Official title: To amend the Internal Revenue Code of 1986 to deny interest and depreciation deductions for taxpayers owning 50 or more single family properties.
Introduced July 10, 2025 by Emilia Strong Sykes · Last progress July 10, 2025
This bill removes two major federal tax benefits—interest deductions and depreciation—for taxpayers who directly or indirectly own 50 or more single‑family rental properties. It defines covered owners, what counts as a single‑family rental, lists limited exceptions (sales to individuals for use as a principal residence and sales/transfers to certain qualified nonprofits), directs Treasury to issue anti‑avoidance regulations, and makes the changes effective for taxable years or property placed in service after enactment.