Sponsors (9)
The bill aims to raise revenue and curb tax‑sheltering through an excise tax on certain excess single‑family homes and tighter rules for chapter 50B liable owners, but it increases tax bills and compliance costs for targeted owners and risks distorting local housing markets and rental supply.
Federal government (taxpayers collectively) could collect new excise tax revenue from designated excess single‑family residences, providing funds for federal programs or deficit reduction.
Owners of non‑liable, compliant homeowners retain mortgage interest and depreciation benefits because the bill narrows the tax base by targeting chapter 50B liability, preserving tax advantages for ordinary homeowner/landlord households.
Some owners of excess single‑family residences may sell to avoid the excise tax, which could increase turnover in certain local housing markets and potentially make some homes available to other buyers.
Owners of designated excess single‑family residences will face a new excise tax liability, increasing their tax burden and potentially forcing sales of properties they would otherwise keep.
Individuals and entities subject to chapter 50B will lose mortgage interest and rental/owner depreciation deductions, raising their taxable income and tax bills.
Housing‑market impacts: owners selling to avoid taxes, reduced incentives for single‑family rental investment, and owners passing on higher costs could lower local home values in some areas, shrink rental supply, and raise rents or purchase prices for renters and buyers.
Based on analysis of 3 sections of legislative text.
Imposes an excise tax on certain owners of "excess" single‑family homes and denies mortgage interest and depreciation deductions for owners liable under that tax, effective for taxable years after enactment.
Creates a new excise tax on certain owners who hold ‘‘excess single-family residences’’ and removes two major federal tax advantages for owners who owe that excise tax: the mortgage interest deduction and depreciation for those single‑family homes. The tax and deduction disallowances apply to taxable years beginning after enactment. The bill amends the Internal Revenue Code by adding a new chapter that levies the excise tax (details of the chapter text were not provided) and by inserting provisions into the mortgage interest (§163) and depreciation (§167) rules to deny those deductions when a taxpayer is liable under the new chapter. It also updates the Subtitle D chapter table and specifies the effective date for the changes.
Official title: To 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.
Introduced February 27, 2025 by Adam Smith · Last progress February 27, 2025