Sponsors (13)
The bill seeks to curb tax-favored, large-scale single-family rental investment to reduce speculative pressure on housing and raise revenue, but does so at the cost of higher taxes and compliance burdens for landlords that may be passed to renters and complicate property transfers to nonprofits.
Renters and the broader housing market: by limiting interest and depreciation tax breaks for large-scale single-family rental owners, the bill reduces tax-driven speculative buying that can inflate home prices and distort the for-sale and rental markets.
Homebuyers purchasing a previously rented property for use as their principal residence: can qualify for a taxable-year exception that facilitates individual owner-occupant purchases (making conversions to owner-occupancy easier).
Nonprofit community housing organizations: preserved eligibility as buyers under the exceptions, supporting transfers of properties into affordable housing or community use.
Renters (especially lower-income tenants): landlords may pass increased tax costs onto tenants, raising rents in affected properties.
Owners of many single-family rentals and small rental businesses: loss of interest and depreciation deductibility will increase taxable income and reduce cash flow, raising tax bills or forcing asset sales.
Housing supply and affordability: higher costs for owners and reduced investment incentives could shrink rental supply or slow new acquisitions, further increasing housing costs and reducing options for renters.
Based on analysis of 3 sections of legislative text.
Disallows interest and depreciation deductions for owners of 50+ single‑family rental properties, with narrow exceptions for sales to owner‑occupants and qualified nonprofits.
Disallows federal tax interest and depreciation deductions for owners who hold 50 or more single‑family residential rental properties. The bill treats a single‑family residential rental property as a residential building with four or fewer units, excludes properties eligible for the low‑income housing credit and certain pre‑existing properties, and allows narrow exceptions when a property is sold to an individual for use as a principal residence or to certain qualified nonprofit entities. Treasury is authorized to issue anti‑avoidance regulations. The changes apply to taxable years and property placed in service after enactment.
Introduced March 11, 2025 by Raphael Gamaliel Warnock · Last progress March 11, 2025