Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB788 Compare Versions

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Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 788
5	5	To amend the Internal Revenue Code of 1986 to impose an excise tax
6	6	on the failure of certain hedge funds owning excess single-family resi-
7	7	dences to dispose of such residences, and for other purposes.
8	8	IN THE SENATE OF THE UNITED STATES
9	9	FEBRUARY27, 2025
10	10	Mr. M
11	11	ERKLEY(for himself, Mr. KING, Mr. VANHOLLEN, Mr. GALLEGO, Mr.
12	12	S
13	13	ANDERS, and Mr. KELLY) introduced the following bill; which was read
14	14	twice and referred to the Committee on Finance
15	15	A BILL
16	16	To amend the Internal Revenue Code of 1986 to impose
17	17	an excise tax on the failure of certain hedge funds own-
18	18	ing excess single-family residences to dispose of such
19	19	residences, and for other purposes.
20	20	Be it enacted by the Senate and House of Representa-1
21	21	tives of the United States of America in Congress assembled, 2
22	22	SECTION 1. SHORT TITLE. 3
23	23	This Act may be cited as the ‘‘HOPE (Humans over 4
24	24	Private Equity) for Homeownership Act’’. 5
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27	27	•S 788 IS
28	28	SEC. 2. EXCISE TAX ON CERTAIN TAXPAYERS FAILING TO 1
29	29	SELL EXCESS SINGLE-FAMILY RESIDENCES. 2
30	30	(a) I
31	31	NGENERAL.—Subtitle D of the Internal Rev-3
32	32	enue Code of 1986 is amended by adding at the end the 4
33	33	following new chapter: 5
34	34	‘‘CHAPTER 50B—EXCESS SINGLE-FAMILY 6
35	35	RESIDENCES 7
36	36	‘‘Sec. 5000E. Newly acquired single-family residences.
37	37	‘‘Sec. 5000F. Excess single-family residences.
38	38	‘‘Sec. 5000G. Definitions and other special rules.
39	39	‘‘SEC. 5000E. NEWLY ACQUIRED SINGLE-FAMILY RESI-
40	40	8
41	41	DENCES. 9
42	42	‘‘(a) I
43	43	NGENERAL.—In the case of a hedge fund tax-10
44	44	payer, there is hereby imposed a tax on the acquisition 11
45	45	of any newly acquired single-family residence equal to the 12
46	46	greater of— 13
47	47	‘‘(1) 15 percent of the purchase price, or 14
48	48	‘‘(2) $10,000. 15
49	49	‘‘(b) N
50	50	EWLYACQUIREDSINGLE-FAMILYRESI-16
51	51	DENCE.—For purposes of this section, the term ‘newly ac-17
52	52	quired single-family residence’ means any single-family 18
53	53	residence which was acquired by the taxpayer in any tax-19
54	54	able year which begins after the date of the enactment 20
55	55	of this chapter. 21
56	56	‘‘(c) P
57	57	URCHASEPRICE.—For purposes of this sec-22
58	58	tion, the term ‘purchase price’ means the adjusted basis 23
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61	61	•S 788 IS
62	62	of the newly acquired single-family residence on the date 1
63	63	such residence is purchased. 2
64	64	‘‘SEC. 5000F. EXCESS SINGLE-FAMILY RESIDENCES. 3
65	65	‘‘(a) I
66	66	NGENERAL.—In the case of an applicable tax-4
67	67	payer who fails to meet the requirements of subsection (b), 5
68	68	there is hereby imposed a tax equal to the product of— 6
69	69	‘‘(1) $5,000, and 7
70	70	‘‘(2) the excess of— 8
71	71	‘‘(A) the number of applicable single-family 9
72	72	residences owned by the taxpayer as of the last 10
73	73	day of the taxable year, over 11
74	74	‘‘(B) the maximum permissible units for 12
75	75	the taxable year. 13
76	76	‘‘(b) R
77	77	EQUIREMENT.— 14
78	78	‘‘(1) I
79	79	N GENERAL.—An applicable taxpayer 15
80	80	meets the requirement of this subsection for any tax-16
81	81	able year if the number of applicable single-family 17
82	82	residences owned by the taxpayer as of the last day 18
83	83	of the taxable year is equal to or less than the max-19
84	84	imum permissible units determined with respect to 20
85	85	such taxpayer for such taxable year. 21
86	86	‘‘(2) S
87	87	PECIAL RULE FOR CERTAIN SALES .—For 22
88	88	purposes of applying paragraph (1), a single-family 23
89	89	residence which is sold or transferred in a disquali-24
90	90	fied sale during the taxable year shall be treated as 25
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93	93	•S 788 IS
94	94	a single-family residence which is owned by the ap-1
95	95	plicable taxpayer as of the last day of such taxable 2
96	96	year. 3
97	97	‘‘(c) M
98	98	AXIMUMPERMISSIBLEUNITS.—The max-4
99	99	imum permissible units with respect to any applicable tax-5
100	100	payer for any taxable year shall be determined as follows: 6
101	101	‘‘In the case of—
102	102	The maximum permis-
103	103	sible units for a hedge
104	104	fund taxpayer is—
105	105	The maximum permis-
106	106	sible units for any other
107	107	applicable taxpayer is—
108	108	the first full taxable year
109	109	beginning after the ap-
110	110	plicable date . . .
111	111	90 percent of the num-
112	112	ber of applicable sin-
113	113	gle-family residences
114	114	owned by the taxpayer
115	115	on the applicable date
116	116	50 plus 90 percent of the
117	117	number of applicable
118	118	single-family resi-
119	119	dences owned by the
120	120	taxpayer on the appli-
121	121	cable date
122	122	the second taxable year
123	123	beginning after the ap-
124	124	plicable date . . .
125	125	80 percent of the num-
126	126	ber of applicable sin-
127	127	gle-family residences
128	128	owned by the taxpayer
129	129	on the applicable date
130	130	50 plus 80 percent of the
131	131	number of applicable
132	132	single-family resi-
133	133	dences owned by the
134	134	taxpayer on the appli-
135	135	cable date
136	136	the third taxable year be-
137	137	ginning after the ap-
138	138	plicable date . . .
139	139	70 percent of the num-
140	140	ber of applicable sin-
141	141	gle-family residences
142	142	owned by the taxpayer
143	143	on the applicable date
144	144	50 plus 70 percent of the
145	145	number of applicable
146	146	single-family resi-
147	147	dences owned by the
148	148	taxpayer on the appli-
149	149	cable date
150	150	the fourth taxable year
151	151	beginning after the ap-
152	152	plicable date . . .
153	153	60 percent of the num-
154	154	ber of applicable sin-
155	155	gle-family residences
156	156	owned by the taxpayer
157	157	on the applicable date
158	158	50 plus 60 percent of the
159	159	number of applicable
160	160	single-family resi-
161	161	dences owned by the
162	162	taxpayer on the appli-
163	163	cable date
164	164	the fifth taxable year be-
165	165	ginning after the ap-
166	166	plicable date . . .
167	167	50 percent of the num-
168	168	ber of applicable sin-
169	169	gle-family residences
170	170	owned by the taxpayer
171	171	on the applicable date
172	172	50 plus 50 percent of the
173	173	number of applicable
174	174	single-family resi-
175	175	dences owned by the
176	176	taxpayer on the appli-
177	177	cable date
178	178	the sixth taxable year be-
179	179	ginning after the ap-
180	180	plicable date . . .
181	181	40 percent of the num-
182	182	ber of applicable sin-
183	183	gle-family residences
184	184	owned by the taxpayer
185	185	on the applicable date
186	186	50 plus 40 percent of the
187	187	number of applicable
188	188	single-family resi-
189	189	dences owned by the
190	190	taxpayer on the appli-
191	191	cable date
192	192	the seventh taxable year
193	193	beginning after the ap-
194	194	plicable date . . .
195	195	30 percent of the num-
196	196	ber of applicable sin-
197	197	gle-family residences
198	198	owned by the taxpayer
199	199	on the applicable date
200	200	50 plus 30 percent of the
201	201	number of applicable
202	202	single-family resi-
203	203	dences owned by the
204	204	taxpayer on the appli-
205	205	cable date
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208	208	•S 788 IS
209	209	‘‘In the case of—
210	210	The maximum permis-
211	211	sible units for a hedge
212	212	fund taxpayer is—
213	213	The maximum permis-
214	214	sible units for any other
215	215	applicable taxpayer is—
216	216	the eighth taxable year
217	217	beginning after the ap-
218	218	plicable date . . .
219	219	20 percent of the num-
220	220	ber of applicable sin-
221	221	gle-family residences
222	222	owned by the taxpayer
223	223	on the applicable date
224	224	50 plus 20 percent of the
225	225	number of applicable
226	226	single-family resi-
227	227	dences owned by the
228	228	taxpayer on the appli-
229	229	cable date
230	230	the ninth taxable year
231	231	beginning after the ap-
232	232	plicable date . . .
233	233	10 percent of the num-
234	234	ber of applicable sin-
235	235	gle-family residences
236	236	owned by the taxpayer
237	237	on the applicable date
238	238	50 plus 10 percent of the
239	239	number of applicable
240	240	single-family resi-
241	241	dences owned by the
242	242	taxpayer on the appli-
243	243	cable date
244	244	any taxable year begin-
245	245	ning more than 9
246	246	years after the applica-
247	247	ble date . . .
248	248	0 50.
249	249	‘‘(d) DEFINITIONS.—For purposes of this section— 1
250	250	‘‘(1) A
251	251	PPLICABLE SINGLE -FAMILY RESI -2
252	252	DENCE.—The term ‘applicable single-family resi-3
253	253	dence’ means any single-family residence which was 4
254	254	acquired on or before the applicable date. 5
255	255	‘‘(2) A
256	256	PPLICABLE DATE.— 6
257	257	‘‘(A) I
258	258	N GENERAL.—The term ‘applicable 7
259	259	date’ means— 8
260	260	‘‘(i) the last day of the first full tax-9
261	261	able year ending on or after the date of the 10
262	262	enactment of this chapter, or 11
263	263	‘‘(ii) in the case of any taxpayer de-12
264	264	scribed in subparagraph (B), the date pro-13
265	265	vided in such subparagraph. 14
266	266	‘‘(B) T
267	267	AXPAYERS CHANGING STATUS .— 15
268	268	‘‘(i) I
269	269	N GENERAL.—In the case of any 16
270	270	applicable taxpayer described in clause (ii), 17
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273	273	•S 788 IS
274	274	the applicable date means the last day of 1
275	275	the taxable year immediately preceding the 2
276	276	taxable year in which the taxpayer is de-3
277	277	scribed in such clause. 4
278	278	‘‘(ii) A
279	279	PPLICABLE TAXPAYER DE -5
280	280	SCRIBED.—An applicable taxpayer is de-6
281	281	scribed in this clause with respect to any 7
282	282	taxable year if— 8
283	283	‘‘(I) such taxpayer was not a 9
284	284	hedge fund taxpayer for the preceding 10
285	285	taxable year, and 11
286	286	‘‘(II) such taxpayer is a hedge 12
287	287	fund taxpayer for such taxable year. 13
288	288	‘‘(3) D
289	289	ISQUALIFIED SALE.—The term ‘disquali-14
290	290	fied sale’ means any sale or transfer to— 15
291	291	‘‘(A) a corporation or other entity engaged 16
292	292	in a trade or business, or 17
293	293	‘‘(B) an individual who owns any other sin-18
294	294	gle-family residence at the time of such sale or 19
295	295	transfer. 20
296	296	‘‘SEC. 5000G. DEFINITIONS AND OTHER SPECIAL RULES. 21
297	297	‘‘(a) A
298	298	PPLICABLETAXPAYER.—For purposes of this 22
299	299	chapter— 23
300	300	‘‘(1) I
301	301	N GENERAL.—The term ‘applicable tax-24
302	302	payer’ means any applicable entity which— 25
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305	305	•S 788 IS
306	306	‘‘(A) manages funds pooled from investors, 1
307	307	and 2
308	308	‘‘(B) is a fiduciary with respect to such in-3
309	309	vestors. 4
310	310	‘‘(2) A
311	311	PPLICABLE ENTITY.— 5
312	312	‘‘(A) I
313	313	N GENERAL.—The term ‘applicable 6
314	314	entity’ means— 7
315	315	‘‘(i) any partnership, 8
316	316	‘‘(ii) any corporation, or 9
317	317	‘‘(iii) any real estate investment trust. 10
318	318	‘‘(B) E
319	319	XCEPTIONS.—The term ‘applicable 11
320	320	entity’ shall not include— 12
321	321	‘‘(i) an organization which is de-13
322	322	scribed in section 501(c)(3) and exempt 14
323	323	from tax under section 501(a), or 15
324	324	‘‘(ii) an organization which is pri-16
325	325	marily engaged in the construction or reha-17
326	326	bilitation of single-family residences and 18
327	327	which offers such residences for sale in the 19
328	328	ordinary course of business. 20
329	329	‘‘(b) H
330	330	EDGEFUNDTAXPAYER.—For purposes of 21
331	331	this section, the term ‘hedge fund taxpayer’ means, with 22
332	332	respect to any taxable year, any applicable taxpayer which 23
333	333	has $50,000,000 or more in net value or assets under 24
334	334	management on any day during the taxable year. 25
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337	337	•S 788 IS
338	338	‘‘(c) SINGLE-FAMILYRESIDENCE.—For purposes of 1
339	339	this chapter— 2
340	340	‘‘(1) I
341	341	N GENERAL.—The term ‘single-family 3
342	342	residence’ means a residential property consisting of 4
343	343	1- to 4 dwelling units. 5
344	344	‘‘(2) E
345	345	XCEPTIONS.—A residential property shall 6
346	346	not be treated as a residential property described in 7
347	347	clause (i) if— 8
348	348	‘‘(A) such property is unoccupied and ac-9
349	349	quired through foreclosure (other than such a 10
350	350	residence acquired through foreclosure by a 11
351	351	hedge fund taxpayer, as defined in section 12
352	352	5000F(d)(3)), 13
353	353	‘‘(B) such property is— 14
354	354	‘‘(i) not rented or leased, and 15
355	355	‘‘(ii) used as the principal residence 16
356	356	(within the meaning of section 121) of any 17
357	357	person who has an ownership interest in 18
358	358	the applicable taxpayer, or 19
359	359	‘‘(C) such property— 20
360	360	‘‘(i) was a building with respect to 21
361	361	which a credit was allowed under section 22
362	362	42 (relating to the low-income housing 23
363	363	credit), and 24
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366	366	•S 788 IS
367	367	‘‘(ii) is not owned by a hedge fund 1
368	368	taxpayer (as defined in section 2
369	369	5000F(d)(3)). 3
370	370	‘‘(d) A
371	371	CQUISITION; OWNERSHIP.—For purposes of 4
372	372	this chapter, an applicable taxpayer shall be treated— 5
373	373	‘‘(1) as acquiring a single-family residence if 6
374	374	the applicable taxpayer acquires a majority owner-7
375	375	ship interest in the single-family residence, regard-8
376	376	less of the percentage of that ownership interest, 9
377	377	and 10
378	378	‘‘(2) as owning a single-family residence if the 11
379	379	applicable taxpayer owns a majority ownership inter-12
380	380	est in the single-family residence, regardless of the 13
381	381	percentage of that ownership interest. 14
382	382	‘‘(e) A
383	383	GGREGATIONRULES.— 15
384	384	‘‘(1) I
385	385	N GENERAL.—For purposes of this chap-16
386	386	ter, all persons which are treated as a single em-17
387	387	ployer under subsections (a) and (b) of section 52 18
388	388	shall be treated as a single person. 19
389	389	‘‘(2) M
390	390	ODIFICATIONS.—For purposes of this 20
391	391	subsection— 21
392	392	‘‘(A) section 52(a) shall be applied by sub-22
393	393	stituting ‘component members’ for ‘members’, 23
394	394	and 24
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397	397	•S 788 IS
398	398	‘‘(B) for purposes of applying section 1
399	399	52(b), the term ‘trade or business’ shall include 2
400	400	any activity treated as a trade or business 3
401	401	under paragraph (5) or (6) of section 469(c) 4
402	402	(determined without regard to the phrase ‘To 5
403	403	the extent provided in regulations’ in such para-6
404	404	graph (6)). 7
405	405	‘‘(3) C
406	406	OMPONENT MEMBER .—For purposes of 8
407	407	this paragraph, the term ‘component member’ has 9
408	408	the meaning given such term by section 1563(b), ex-10
409	409	cept that the determination shall be made without 11
410	410	regard to section 1563(b)(2).’’. 12
411	411	(b) C
412	412	LERICALAMENDMENT.—The table of chapters 13
413	413	for subtitle D of the Internal Revenue Code of 1986 is 14
414	414	amended by adding at the end the following new item: 15
415	415	‘‘CHAPTER50B—EXCESSSINGLE-FAMILYRESIDENCES’’.
416	416	(c) EFFECTIVEDATE.—The amendments made by 16
417	417	this section shall apply to taxable years beginning after 17
418	418	the date of enactment of this Act. 18
419	419	SEC. 3. DISALLOWANCE OF MORTGAGE INTEREST AND DE-19
420	420	PRECIATION IN CONNECTION WITH SINGLE- 20
421	421	FAMILY RESIDENCES OWNED BY COVERED 21
422	422	TAXPAYERS. 22
423	423	(a) M
424	424	ORTGAGEINTEREST.— 23
425	425	(1) I
426	426	N GENERAL.—Section 163 of the Internal 24
427	427	Revenue Code of 1986 is amended by redesignating 25
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430	430	•S 788 IS
431	431	subsection (n) as subsection (o) and by inserting 1
432	432	after subsection (m) the following new subsection: 2
433	433	‘‘(n) C
434	434	ERTAININTERESTPAID BYCOVEREDTAX-3
435	435	PAYERS.— 4
436	436	‘‘(1) I
437	437	N GENERAL.—No deduction shall be al-5
438	438	lowed under this chapter for a taxable year with re-6
439	439	spect to interest paid or accrued on acquisition in-7
440	440	debtedness with respect to any single-family resi-8
441	441	dence if the owner of such single-family residence is 9
442	442	liable for tax under chapter 50B for such taxable 10
443	443	year. 11
444	444	‘‘(2) D
445	445	EFINITIONS.—For purposes of this sub-12
446	446	section— 13
447	447	‘‘(A) A
448	448	CQUISITION INDEBTEDNESS .—The 14
449	449	term ‘acquisition indebtedness’ has the meaning 15
450	450	given such term under subsection (h)(3)(B), de-16
451	451	termined— 17
452	452	‘‘(i) by substituting ‘single-family resi-18
453	453	dence (as defined in section 5000G(b))’ for 19
454	454	‘qualified residence’, and 20
455	455	‘‘(ii) without regard to clause (ii) 21
456	456	thereof. 22
457	457	‘‘(B) S
458	458	INGLE-FAMILY RESIDENCE .—The 23
459	459	term ‘single-family residence’ has the meaning 24
460	460	given such term under section 5000G(b). 25
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463	463	•S 788 IS
464	464	‘‘(C) OWNERSHIP.—The rules of section 1
465	465	5000G(c) shall apply for purposes of deter-2
466	466	mining ownership.’’. 3
467	467	(2) E
468	468	FFECTIVE DATE.—The amendments made 4
469	469	by this subsection shall apply to taxable years begin-5
470	470	ning after the date of the enactment of this Act. 6
471	471	(b) D
472	472	EPRECIATION.— 7
473	473	(1) I
474	474	N GENERAL.—Section 167 of the Internal 8
475	475	Revenue Code of 1986 is amended by redesignating 9
476	476	subsection (i) as subsection (j) and by inserting after 10
477	477	subsection (h) the following new subsection: 11
478	478	‘‘(i) D
479	479	EDUCTIONDISALLOWED FOR DISQUALIFIED 12
480	480	S
481	481	INGLEFAMILYPROPERTYOWNERS.— 13
482	482	‘‘(1) I
483	483	N GENERAL.—No deduction shall be al-14
484	484	lowed under this section for a taxable year with re-15
485	485	spect to a single-family residence if the owner of 16
486	486	such single-family residence is liable for tax under 17
487	487	chapter 50B for such taxable year. 18
488	488	‘‘(2) D
489	489	EFINITIONS.—For purposes of this sub-19
490	490	section— 20
491	491	‘‘(A) S
492	492	INGLE-FAMILY RESIDENCE .—The 21
493	493	term ‘single-family residence’ has the meaning 22
494	494	given such term under section 5000G(b). 23
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497	497	•S 788 IS
498	498	‘‘(B) OWNERSHIP.—The rules of section 1
499	499	5000G(c) shall apply for purposes of deter-2
500	500	mining ownership.’’. 3
501	501	(2) E
502	502	FFECTIVE DATE.—The amendments made 4
503	503	by this subsection shall apply to taxable years begin-5
504	504	ning after the date of the enactment of this Act. 6
505	505	Æ
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