HOMES Act Houses Over Middle-Class Exploitation Schemes Act
Impact
If enacted, this legislation would significantly alter the tax landscape for large-scale residential property owners, particularly those who manage vast portfolios of single-family homes. By denying such owners the ability to write off interest payments and depreciation, the bill aims to make rental properties owned by smaller, less affluent landlords more financially viable. This could lead to a more equitable housing market as it addresses the concentration of rental housing under large property management firms.
Summary
House Bill 4352, also known as the 'HOMES Act' or 'Houses Over Middle-Class Exploitation Schemes Act,' aims to amend the Internal Revenue Code of 1986 by disallowing interest and depreciation deductions for taxpayers who own 50 or more single-family rental properties. The bill emerged from concerns about the practices of larger landlords who may exploit tax deductions to increase profits at the expense of low and middle-income tenants.
Contention
However, the bill is not without controversy. Critics argue that the changes could inadvertently strain housing supply by disincentivizing investment in rental properties, which could lead to higher rents overall. The legislation has faced pushback from real estate associations and some lawmakers who advocate for a more market-driven approach to housing. Advocates for low-income housing, however, see the disallowance of these deductions as a necessary step to promote fairness in the housing market and protect middle-class renters from exploitation.