WASHINGTON, DC–The National Association of Home Builders had decided to oppose the tax reform plan expected to be released tomorrow by the House of Representatives. The association had been working with Congress on the plan and had expected it to include a homeownership tax credit, according to Granger MacDonald, chairman of the NAHB and a home builder and developer from Kerrville, Texas. This would have replaced the mortgage-interest deduction that is currently part of the tax code and would be eliminated under the reform package.
Instead, executives from the association learned over the weekend that the plan would not include this credit. The association plans to lobby against the measure when it is released.
“By sharply reducing the number of taxpayers who would itemize, what's left is a tax bill that essentially eviscerates the mortgage interest deduction and strips the tax code of its most vital homeownership tax benefit,” MacDonald said in a prepared statement.
“This tax blueprint will harm home values, act as a tax on existing home owners and force many younger, aspiring home buyers out of the market,” he said.
NAHB's opposition is yet another challenge that Republicans will face in trying to pass their tax measure, which will be unveiled tomorrow. Because they are going to try to pass it via reconciliation, the measure cannot cost more than $1.5 trillion based on the Senate budget resolution approved last week. However, based on their initial proposal the Republican measure is likely to cost $2.4 trillion, according to an analysis by the Tax Policy Center.
To make the numbers work, Republicans will have to cut many beloved deductions and loopholes — including, it appears, the mortgage interest deduction.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
