It’s no secret that the National Association of Realtors (NAR), the largest real estate trade group in the U.S., is not a fan of the tax reform plans that passed both houses of Congress, releasing statements and data suggesting they could cause home values to plummet.
Now that Congressional lawmakers are in the midst of reconciling the differences between the House and Senate versions of the tax reform bill, NAR is hoping that there is still time to impact changes that will forestall the negative effects.
NAR today published a letter from President Elizabeth Mendenhall addressed to Congressional leaders. In it, she says NAR wants to see three major alterations to the tax reform bill:
- “First, please retain current law on the capital gains exclusion for the sale of a principal residence” aka, keep things the way they are now and have been since 1997, so that homeowners who live in their primary residence for two of the last five years can sell it without getting taxed on up to $250,000 of their gains (or $500,000 for married couples). The tax reform plan under consideration would force homeowners to live in their home for five of the last eight years, increasing the time necessary to avoid a tax-free sales gain.
- NAR really wants to see the mortgage interest deduction (how much in interest payments you can write-off of your taxes) stay put at up to $1 million as per the Senate reform bill, instead of the House’s plan to cut it down to $500,000.
- NAR says Congress should consider allowing income or sales tax deductions, especially as it proposes removing state and local tax deductions (SALT), which will adversely affect many people in hot markets like the coasts.
There’s a couple other recommendations in the letter, but these are the big three. Read the full letter here.