As you may know, the U.S. Senate Finance Committee recently proposed a “Blank Slate” approach to tax reform. This approach would initially eliminate every provision in the tax code. Any eliminated provision would only be added to any new tax legislation if the expenditure could be justified by helping to grow the economy.
Members of the Iowa Association of Realtors® and the National Association of Realtors® agree that reforms to portions of the tax code may be needed, but it shouldn’t be done at the expense of homeowners, especially since real estate markets are finally on the road to recovery.
There’s a lot riding on this type of approach, which may jeopardize provisions that encourage real estate ownership and investment, such as mortgage interest deduction, capital gains exemption on sale of a primary residence, home tax credits, etc. These are all extremely important tax provisions that have benefited homeowners across Iowa and the nation for many years.
To this end, IAR and NAR leadership have been working tirelessly to encourage national legislators to do no harm to the tax code in relation to homeownership.
Here are a few of the provisions Realtors® across the United States are asking lawmakers to retain as they work to rewrite the tax code.
- Preserve the mortgage interest deduction in its current form.
- Preserve the exclusion of capital gains on the sale of a principal residence.
- Preserve the deduction for property taxes.
- Preserve and make permanent the temporary exclusion of income from discharge of mortgage debt (mortgage cancellation).
- Shorten the depreciation periods of commercial and residential buildings to reflect the true useful lives of these assets. Preserve and make permanent the temporary provision allowing faster write-off for leasehold improvements.
- Preserve provisions that allow for the deferral of gain on the like-kind exchange of real property.
Realtors® are the defenders of homeownership and will continue fighting to keep homeowners’ best interests in the forefront of public policy discussions in Washington D.C. as well as Des Moines.
Sources: Iowa Association of Realtors® and National Association of Realtors®