In 2019, NAR will focus on the following public policy initiatives: Federal Taxes and Real Estate The Tax Cuts and Jobs Act was enacted in December 2017, and is generally effective as of January 1, 2018. The new law includes many changes that will affect residential and commercial real estate, as well as real estate professionals. As with most major legislation, many details as to how the new law will be applied and administered have been left to regulators (Treasury Department and Internal Revenue Service).
Treasury and IRS officials have already begun to issue guidance on the bill and more is expected over the coming weeks and months. NAR is monitoring the process carefully and will be weighing in as necessary to help ensure the most positive outcome for real estate and practitioners as possible. Extension of Expired Mortgage Debt Cancellation Tax Relief – A longstanding but temporary provision to provide relief from taxation for debtors who have been relieved of mortgage debt in connection with their principal residence expired at the end of 2017. NAR is advocating a retroactive extension of the exclusion. 20% Deduction on Qualified Business Income for Pass-Through Business Entities and Sole Proprietors – The 2017 tax law changes provide a significant tax benefit for real estate professionals who work for themselves or own S corporations, limited liability companies (LLCs) or partnerships.
The new 20% deduction can greatly lower federal taxes but is complex for many. NAR is working to ensure that the deduction is available to all real estate agents and brokers and that its application to rental real estate is straightforward. Monitor Implementation and Facilitate the Use of Opportunity Zones – The new tax law also provided a bold new initiative to encourage investment in economically depressed areas throughout the U.S. Opportunity Zones (OZs) are especially attractive to real property investments by providing significant deferral and exclusions in capital gains that are reinvested in qualified areas. NAR is working to help ensure the rules implementing the new OZs fulfill their promise. Index to Inflation the $750,000 cap on Mortgage Interest Deduction – The 2017 tax changes lowered the amount of deductible mortgage debt to loans of not more than $750,000, which is not indexed for inflation.
NAR is urging Congress to index this cap for future inflation so the limit does not pinch more homeowners each year. Index to Inflation the Capital Gains Exclusion on Sale of Principal Residence – Current law provides sellers of a principal residence an exemption from capital gains tax of up to $250,000 ($500,000 for joint returns). This exclusion was never indexed for inflation, making it now worth only about half its original value. NAR is advocating this exclusion be indexed for inflation before the benefit shrinks more. More information: The Tax Cuts and Jobs Act – What it Means for Homeowners and Real Estate Professionals Staff Contact: Evan Liddiard, Director of Federal Taxation, ELiddiard@realtors.org / 202-383-1083 National Flood Insurance Program (NFIP) Congress must pass a long-term reauthorization of the NFIP and include meaningful reforms that open the door to private market flood insurance and modernize flood mapping and mitigation investments. Flood insurance is required for a mortgage in more than 20,000 communities nationwide. While there is a growing private market for flood insurance, millions of small business and home owners currently depend on the NFIP to protect their property against flooding, the most costly and common natural disaster in the United States. Without flood insurance, property owners would have to rely on the Federal government for taxpayer-funded disaster relief after major floods. The program is set to expire on May 31, 2019
More information: Topic: National Flood Insurance Program Staff Contact: Austin Perez, Senior Policy Representative, APerez@realtors.org / 202-383-1046 Association Health Plans NAR supports the final 2018 regulation by the Department of Labor (DOL) to expand access to Association Health Plans (AHPs) and offer more affordable health insurance options for working owners including real estate professionals. An AHP plan would be treated as a large employer plan under federal law, subject to different rules than plans in the individual and small group insurance markets that tend to be more costly and have fewer options.
However, Congress may have to clarify and codify some of these regulatory provisions in order to address conflicting state laws and enforcement as well as recent litigation by a dozen state Attorneys General. The DOL final rule also includes important consumer protections that could not make membership, payment, or coverage conditional on the health status of an enrollee and maintains protections put in place by the Affordable Care Act (ACA), including protections for pre-existing conditions. For more information visit: NAR’s Work for an Association Health Plan Staff Contacts: Christie DeSanctis, Director of Federal Banking, Lending, and Housing Finance Policy, email@example.com / 202-383-1102 and Austin Perez, Senior Policy Representative, APerez@realtors.org / 202-383-1046.
To learn more about NAR’s efforts at the federal level on behalf of the real estate industry read NAR’s The Washington Report or see the full 2019 Advocacy Agenda which covers legislative and regulatory policy activities. Resources US Congress View session schedule, members of congress and current legislation US Senate View Senators, committees, session schedule and current legislation US House View House of Representative members, committees, session schedule and current legislation Congressional District Maps A breakdown of Ohio’s Congressional Map (2012-2022) US Housing and Urban Development A listing of all federal housing programs available Consumer Finance Protection Bureau Aims to make financial markets work for consumers FEMA Flood Mapping Identifies flood hazards, assesses flood risks and partners with states and communities to provide accurate flood hazard and risk data to guide them to mitigation actions.
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