The National Association of Home Builders is opposing a congressional bill, which passed the House of Representatives on Monday, that it said could have a “significant negative impact on the multifamily housing industry.”

While expressing support for some of the aims of HR 3996, dubbed the Temporary Tax Relief Act, the builders’ group said in a statement Friday it opposes a provision raising taxes on capital gain income generated by carried interest held by general partners in real estate investment partnerships.

This tax increase, which the group said could raise the tax rate for capital-gains income related to some types of real estate partnerships from 15 percent to 35 percent, “would disrupt the investment relationship between developers and investors,” according to a statement by Brian Catalde, NAHB president.

“NAHB shares the goals embodied in HR 3996 to … help struggling families keep their homes,” Catalde said. “However, the carried interest proposal to offset the cost of this relief is the most significant and potentially most disruptive tax on real estate since the 1986 Tax Reform Act and would result in higher prices for housing, less job creation and lower community development, especially in underserved areas,” he added.

The legislation would extend through 2014 the tax deduction for mortgage-insurance premiums; would allow an exclusion from gross income for up to $2 million of income attributable to discharges of home mortgage indebtedness incurred after Jan. 1, 2007; and would limit the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that can be allocated to a nonqualified use of that residence, such as a use other than as a principal residence.

A Congressional Budget Office analysis of the legislation states that the bill’s provision with the largest effect would raise the exemption amounts and extend for one year the use of nonrefundable credits for the Alternative Minimum Tax, a tax that requires all taxpayers pay at least a minimum amount of federal income tax for their income bracket no matter the amount of claimed deductions and credits.

That tax, which was created in 1969 but has been repeatedly put off, would have the largest impact on high-income households but could affect about 23 million people, including families who earn $75,000 or year or less, the Los Angeles Times reports.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription