Affordable Housing and Homeownership Protection Act of 2024
The legislation aims to safeguard homeownership opportunities for individuals and families by counteracting the influence of large-scale investors in the housing market. Tax revenues from this initiative will be allocated primarily to the Housing Trust Fund and the Capital Magnet Fund, which support affordable housing initiatives. By redirecting funds from investor purchases back into housing resources, the bill hopes to promote more equitable access to homeownership. The anticipated result is a more stable housing market with less volatility driven by corporate acquisitions of residential properties.
SB3673, known as the Affordable Housing and Homeownership Protection Act of 2024, proposes amendments to the Internal Revenue Code to impose a tax on the purchase of single-family homes by certain categories of large investors. The bill categorizes investors as medium-sized, large, and giant, each subject to a different percentage of tax on purchased homes. Specifically, medium-sized investors face a tax of 1%, large investors 3%, and giant investors 5% on the purchase prices of single-family homes. The intent behind this tax is to deter excessive buying by large entities, which is believed to drive up housing prices and contribute to the affordability crisis in many regions.
Noteworthy points of contention surrounding SB3673 include concerns from real estate investors and market analysts who argue that the new tax could deter investments in housing altogether. They claim that by increasing the financial burden on large investors, the bill may lead to a decrease in new housing developments or renovations of existing properties, ultimately harming the housing supply. Additionally, critics express worries that the bill could disproportionately affect markets that rely on such investments for revitalization. Advocates for affordable housing argue that the benefits of regulating investor purchases outweigh potential drawbacks, asserting the importance of prioritizing homeownership for everyday citizens over profit-driven investments.