Sponsors (2)
The bill prioritizes reducing tax‑advantaged large-scale ownership and closing tax‑avoidance gaps to free up housing for owner-occupants and nonprofits and protect the tax base, but at the cost of higher tax and financing burdens for landlords, potential rent increases, reduced investment in rental housing, and added compliance burdens.
Large-scale owners of 50+ single-family rentals will lose certain tax benefits, likely reducing speculative accumulation and increasing availability of homes for individual buyers or nonprofits.
Individuals buying a home to occupy as their principal residence and qualified nonprofits buying housing can claim depreciation in the year of sale, making conversions to owner-occupancy or nonprofit ownership easier and financially more viable.
Taxpayers and the federal government benefit from stronger anti-avoidance rules and Treasury-authorized regulations that reduce tax sheltering and help protect the tax base.
Small landlords and single‑family rental owners will face higher taxable income and tax bills due to loss of depreciation and other disallowances, reducing their cash flow.
Renters may face higher rents or reduced maintenance because landlords could pass on higher taxes, borrowing costs, or lower net returns to tenants.
The rules could accelerate sales of rental homes and discourage investment in single‑family and small multifamily (1–4 unit) properties, reducing local rental supply and producing short‑term market disruption and price volatility.
Based on analysis of 3 sections of legislative text.
Removes interest and depreciation deductions for taxpayers who own 50+ single‑family rental properties, with narrow exceptions for sales to owner‑occupants or qualified nonprofits.
Introduced July 10, 2025 by Emilia Strong Sykes · Last progress July 10, 2025
Disallows federal tax deductions for interest and depreciation for taxpayers who own 50 or more single-family residential rental properties. Owners meeting that threshold may not deduct interest paid or accrued on those properties and generally may not take depreciation, with narrow exceptions for the taxable year a qualifying sale is made to an individual for use as a principal residence or to a qualified nonprofit. The bill includes definitions, aggregation rules to count related owners together, exemptions for certain low-income housing and new-construction scenarios, and directs the Treasury to issue anti-avoidance regulations. The interest rule applies to debt in taxable years beginning after enactment; the depreciation rule applies to property placed in service in taxable years beginning after enactment.