Plain Language Summary
# HOMES Act Summary **What the Bill Would Do:** The HOMES Act would limit tax deductions for large-scale landlords who own 50 or more single-family rental properties. Specifically, these property owners could no longer claim federal tax deductions for interest payments on mortgages or for depreciation (a deduction that accounts for property wear and tear) on their rental homes. The goal is to discourage large corporations and investors from buying up large numbers of single-family homes, which supporters argue drives up housing costs and reduces affordable housing availability. **Key Details and Who It Affects:** The bill would primarily affect institutional investors and large real estate firms that operate as landlords of single-family homes—not small landlords or typical homeowners.
However, there are exceptions: large landlords could still claim these tax deductions on properties that qualify for low-income housing tax credits (government programs supporting affordable housing) and on newly constructed rental properties. The bill effectively targets what sponsors call "middle-class exploitation schemes" by investment firms that acquire residential neighborhoods. **Current Status:** As of now, the bill is in committee (HR 4352), meaning it has been introduced but has not yet been debated or voted on by the full House of Representatives. It was sponsored by Representative Emilia Strong Sykes, a Democrat from Ohio.
CRS Official Summary
Houses Over Middle-Class Exploitation Schemes Act or the HOMES Act This bill prohibits a taxpayer who owns (directly or indirectly) 50 or more single-family residential rental properties (disqualified single-family property owner) from claiming a federal tax deduction for interest paid (or accrued) in connection with such properties or a federal tax deduction for depreciation in connection with such properties.The bill generally defines a single-family residential rental property as any residential rental property containing four or fewer dwelling units and improvements to real property related to such dwelling units.However, under the bill, a disqualified single-family property owner may still claim a tax deduction for interest and depreciation on (1) single-family residential rental property for which the low-income housing tax credit (LIHTC) may be claimed and (2) certain newly constructed single-family residential rental properties. (The LIHTC program awards tax credits for newly-constructed or substantially rehabilitated low-income housing.)The bill also allows a disqualified single-family property owner to claim a federal tax deduction for interest or depreciation in connection with a single-family residential rental property in the year such property is sold if it is sold toan individual for use as a principal residence;a non-profit organization that creates, develops, or preserves affordable housing;certain community development organizations;a land bank;any resident-owned cooperative or community land trust; ora public housing agency subsidiary.
Latest Action
Referred to the House Committee on Ways and Means.