Attendees at the REALTORS® Legislative Meetings heard directly from the National Association of REALTORS®’ tax policy experts on Sunday afternoon as they weighed in on how to address taxes on home equity.
NAR Executive Vice President and Chief Advocacy Officer Shannon McGahn moderated a panel to discuss NAR’s advocacy around the home equity tax exclusion, with many of the panelists pointing to the organization’s support of the More Homes on the Market Act. The legislation would double the home equity tax exclusion for the first time since 1997.
Evan Liddiard, NAR director of federal tax policy, said while he thinks doubling the home equity exclusion is reason enough to support the bill, there are some other important reasons for supporting the act.
“This is about people who want to move,” Liddiard said. “We have families that need to size up their homes but don’t have access because this tax is locking up inventory.”
Joe Harris, NAR vice president of government advocacy, pointed out that NAR utilizes a multipronged approach to lobby on behalf of members. While much of the work does focus on Congress and driving legislative action, the advocacy team also regularly communicates with White House officials as well as administration staff and decision-makers.
“The White House is an important partner in just about every legislative effort that moves through Congress,” Harris said. “We’ve been very intentional in our efforts. We’ve had over 50 meetings with the White House on this issue, just in this Congress.”
While the More Homes on the Market Act has bipartisan support in the House and Senate, there continues to be skepticism. Matt Stross, NAR director of government advocacy, broke down how NAR’s Advocacy team addresses those concerns and is working to expand the coalition supporting this piece of legislation.
How the Equity Tax Affects Home Inventory
Bringing the research lens to the discussion was Jessica Lautz, NAR deputy chief economist and vice president of research. Lautz connected the dots on how the home equity tax impacts supply, sharing that potential home sellers avoid the tax hit rather than putting their home on the market, further reducing inventory.
“Many households are just going to say, ‘I don’t want to play the musical chairs of moving right now because of capital gains,’” she said. “But then you’re just removing those homes from the market.”
McGahn closed out the session highlighting NAR Advocacy’s new morehomes.realtor webpage that shares all of NAR’s research and fact sheets on the home equity tax. She pointed out that members’ Capitol Hill visits on Wednesday, June 17, come at a pivotal time for housing policy.
Harris said, “Every month, every year that passes by that we’re not doing anything on capital gains, we’re not doing anything on easing the regulatory burdens, lifting red tape, addressing issues around modular housing, manufactured housing. The more time we ‘kick the can,’ the worse the situation is going to be.”
