The NAHB has been heavily engaged in the tax reform debate that has consumed Washington, D.C., this year. The association has worked tirelessly to urge officials to develop policy that protects homeowners and home buyers across the economic spectrum.
Unfortunately, the tax bill passed by the House right before the Thanksgiving holiday abandons lower- and middle-income homeowners in favor of high-income earners and wealthy corporations. Because home ownership should be accessible to all Americans, NAHB is using its tremendous political clout to fight the legislation.
Throughout the debate earlier this fall, NAHB worked with legislators on tax policy that would safeguard the middle class. Upon learning that lawmakers planned to double the standard deduction—weakening the mortgage interest deduction because far fewer people would itemize their tax returns—NAHB brokered a deal with House Ways and Means Chairman Kevin Brady to protect middle-income homeowners. NAHB proposed a robust homeownership tax credit that would help up to 37 million additional homeowners who do not currently itemize, and homeowners who do itemize would continue to see a meaningful tax benefit under this policy.
NAHB negotiated in good faith with members of the Ways and Means Committee, but House leadership pulled out of this deal right before the plan was released. Instead, the House bill as of press time drastically reduces the number of homeowners who can take advantage of the mortgage interest and property tax deductions. It also lowers the cap on mortgage interest for new-home purchases, which can harm home buyers in expensive markets moving forward.
As corporations receive a major tax cut, small businesses get only limited relief.
As I mentioned, NAHB is committed to defeating the legislation. Upon notification that the homeownership tax credit was off the table, the association came out strongly against the bill. NAHB’s outcry has made waves in the media. National news outlets to local newspapers nationwide—as well as major network radio and television programs—have taken our message of outrage to millions of people.
NAHB is more encouraged by the Senate’s tax plan. For many small businesses, this bill provides more relief. It keeps the complete low-income housing tax credit program in place, and it focuses more on promoting homeownership. For one, it keeps the mortgage interest deduction cap at $1 million. Plus, it retains the mortgage interest deduction for second homes and the student loan interest deduction, both of which were taken out of the House bill.
Tax reform will be an evolving issue in the time ahead, and NAHB will keep its members informed as things change.
The association is mobilizing its lobbying and grassroots efforts to put a stop to the House legislation that will hurt millions of hard-working families and marginalize the American dream of home ownership. NAHB urges legislators to reconsider a home ownership tax credit to help the middle class and the broader economy.
Home ownership has been a key part of the tax code since federal income taxes were established more than 100 years ago. It must remain a priority.
