Side by Side Comparison of House & Senate Tax Legislation
NAR is OPPOSED to H.R. 1, the “Tax Cut and Jobs Act” tax reform legislation. This bill is a direct threat to consumers, to homeowners and to our businesses. Not only will millions of homeowners not benefit from the proposal, many will get a tax increase. Additionally, homeowners could lose substantial equity from the more than 10% drop in home values likely to result if the bill is enacted.
What the Legislation Would Do
- Limits the exemption on Capital Gains Tax from the sale of a primary residence
- New rules would require homeowners to live in their home for 5 of 8 years before a sale to qualify for the exemption, versus just 2 of previous 5 years today. This will create a hardship to homeowners who have to move inside that five-year window.
- Exemption phases out for single filers with incomes over $250K ($500K for joint returns).
- Caps the mortgage interest deduction at $500K for new mortgages
- Cap applies to new mortgage debt (but not refinancing) incurred after November 2, 2017.
- Limit is not indexed to inflation causing its value to even further diminish over time.
- Increases the standard deduction
- Puts homeownership tax incentives beyond the reach of more than 90% of American families.
- Eliminates the deduction for state and local income or sales taxes.
- Eliminates the Mortgage Interest Deduction for second homes.
- Eliminates the deduction for moving expenses.
- Eliminates the deduction on interest on student loans.
- Eliminates the deduction for medical expenses, even for the elderly.
- Eliminates the deduction for personal casualty losses, such as from hurricanes or wildfires.
All this from a bill that is supposed to improve the current system. Not only is this legislation a clear and present danger to American homeownership, it will cost our children and grandchildren $1.5 trillion in new federal debt.
- Millions of middle class homeowners would see a tax hike under this plan.
- This plan attacks homeownership and sticks future generations with a $1.5 trillion price tag.
- America’s homeowners should not pay for corporate tax cuts.
- Hard-working homeowners will lose money when their home values fall, while corporations will get a huge tax break.
- Homeowners in all 50 states would be double-taxed on the money they pay for state/local taxes.
- If you buy a home and then have to move within 5 years, you could be hit with a big tax bill under this plan.