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Congress·In Committee·about 1 year ago

Congress proposes new taxes to push large investment funds to sell single-family homes

Also known as: HOPE (Humans over Private Equity) for Homeownership Act

Legislative Progress

✓ Filed
Review
Senate
House
President

Impacts

Negative Impacts(1)
Retiree
Hurts
Mixed Impacts(4)
Housing Assistance
Neutral
Child Tax Credit
Neutral
Renter
Neutral
Homeowner
Neutral

Key Points

  • Adds a new federal tax on big investment funds when they buy a single-family home: 15% of the purchase price or $10,000, whichever is higher.
  • Sets yearly limits on how many existing single-family homes these investors can keep, pushing them to sell more over time; a $5,000 tax applies for each home above the limit.
  • Treats certain “sales” as not really reducing holdings if the home is sold to a business or to a person who already owns another single-family home.
  • If an investor owes the new housing tax for the year, the bill also blocks them from taking federal tax breaks tied to those homes, like mortgage interest and depreciation deductions.
  • Defines which owners are covered, mainly funds that manage pooled investor money; “hedge fund” coverage starts at $50 million or more in assets under management.
HousingTaxesConsumer Protection

Milestones

2 milestones2 actions
Feb 27, 2025Senate

Read twice and referred to the Committee on Finance.

Feb 27, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

Starting with the first taxable year that begins after the law is enacted

New excise tax applies when covered hedge funds buy single-family homes

If a covered fund buys a 1–4 unit home after the law starts, it would owe 15% of the purchase price (or $10,000 minimum), making investor bidding more expensive right away.

Applies to taxable years beginning after enactment; first bills would show up when those tax years end

Annual $5,000-per-excess-home penalty begins for covered owners above allowed limits

Large portfolios of houses would face yearly charges if they don’t shrink to the permitted number by year-end, creating pressure to sell homes over time.

First full taxable year after the “applicable date,” then declines yearly for about 9 years

Allowed number of homes a covered hedge fund can keep starts stepping down (90%, then 80%, etc.)

Each year, keeping big stacks of houses becomes harder without paying penalties, which could lead to more homes listed for sale in waves.

Taxable years beginning after enactment (only for owners liable under the new chapter)

Mortgage-interest deduction is disallowed for any single-family home in years the owner owes the new taxes

Covered owners can’t use mortgage interest on these homes to reduce their taxable income in those years, increasing the cost of holding the homes.

Taxable years beginning after enactment (only for owners liable under the new chapter)

Depreciation deduction is disallowed for any single-family home in years the owner owes the new taxes

Covered owners can’t claim the usual tax write-off for wear-and-tear on these homes in those years, which reduces the tax advantage of being a large landlord.

Roughly a decade after implementation begins (depends on each firm’s tax year)

By about 9+ years after the phase-down starts, covered hedge funds would be pushed toward holding zero of the pre-enactment homes

In the long run, this aims to move these homes back to individual buyers (or at least away from large hedge-fund ownership), depending on how firms respond and what buyers are available.

Related News

4 articles
Senator Martin Heinrich (website)·about 1 month ago

Heinrich to Hedge Funds: “Get Out of the Housing Market”

Press release on Sen. Heinrich cosponsoring the HOPE for Homeownership Act and describing penalties aimed at large investors in single-family homes.

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Senator Mark Kelly (website)·about 1 year ago

Kelly, Merkley Launch Renewed Effort to Keep Hedge Funds out of America’s Housing Market

Announcement of the HOPE for Homeownership Act, outlining the 15% (or $10,000) acquisition tax, loss of certain tax breaks, and $5,000-per-home penalty for excess holdings.

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Senator Jeff Merkley (website)·about 1 year ago

Senator Merkley, Representative Smith Launch Renewed Effort to Kick Hedge Funds Out of America’s Housing Market

Press release describing the HOPE for Homeownership Act’s approach to discouraging large funds from owning and acquiring single-family homes.

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Source Information

Document Type

Congressional Bill

Official Title

HOPE (Humans over Private Equity) for Homeownership Act

Bill NumberS 788
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Finance.

Sponsor

Cosponsors

(6)
D: 4I: 2

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.