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Redesignates existing subsection (n) as subsection (o) and inserts a new subsection (n) that disallows a deduction for interest on acquisition indebtedness with respect to any single-family residence when the owner is liable for tax under chapter 50B for the taxable year; provides definitions and cross-references to section 5000G for ‘single-family residence’ and ownership rules and modifies the definition of ‘acquisition indebtedness.’
Redesignates existing subsection (i) as subsection (j) and inserts a new subsection (i) after subsection (h) that disallows a depreciation deduction under section 167 for a single-family residence if the owner is liable for tax under chapter 50B for the taxable year; defines ‘single-family residence’ by reference to section 5000G(b) and applies section 5000G(c) ownership rules.
Creates a new federal excise tax on certain taxpayers who hold on to “excess” single‑family homes instead of selling them. It also removes two common tax breaks for those taxpayers: the mortgage interest deduction and the depreciation deduction on single‑family houses they own.
These changes are written into the Internal Revenue Code and apply starting with tax years that begin after the law takes effect. The goal is to push covered owners with more homes than a set limit to sell them, rather than keep them off the market.
Referred to the House Committee on Ways and Means.
Introduced February 27, 2025 by Adam Smith · Last progress February 27, 2025
