The National Association of Realtors (NAR) released a letter Tuesday asking Congress to make three critical changes to the tax reform bill.
NAR President Elizabeth Mendenhall calls upon Congressional leaders to “retain current law on the capital gains exclusion for the sale of a principal residence” to ensure that homeowners who live in their home for two of the last five years are able to sell it without being taxed on up to $250,000 of their single-filer gains — or $500,000 for joint returns. The tax reform plan currently being deliberated would increase the number of years a homeowner must live in their principal residence to five of the last eight years in order to avoid a tax-free sales gain.
Second, NAR advocates that the mortgage interest deduction remain at the Senate reform bill’s $1 million limit. “Lowering the cap to $500,000, as the House bill does, would have an immediate and very negative impact on many high cost markets,” warns Mendenhall.
Lastly, NAR asks that Congress consider permitting income or sales tax deductions to provide some relief to those who will suffer under the removal of state and local tax deductions. Mendenhall writes, “If property taxes are the only deductible levies, we fear that state and local governments will shift more of the tax burden onto owners of real property.”
Hoping to protect middle-class homeowners, NAR would like to see Congress consider its above appeals as lawmakers are currently working to reconcile the differences between the House and Senate versions of the tax reform bill.
On Wednesday afternoon, House and Senate Republicans announced they reached an agreement on the tax bill, but no details are immediately available, according to The New York Times.