On May 28, 2021, the Biden Administration released the FY 2022 Budgetpdf of the United States Government, which includes the Budget Message of the President, information on the President’s priorities, and its summary request for fiscal year (FY) 2022 discretionary funding. It includes funding for two plans the President has already put forward — the American Jobs Plan and the American Families Plan. Budget items of note to the real estate industry are summarized below.

The US Department of Treasury also released the “General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals,” otherwise known as the Green Bookpdf, which includes details of tax proposals included in the President’s FY 2022 budget to pay for infrastructure investments.  Two items of particular concern for the real estate industry include proposed changes to like-kind exchanges and to the taxation of capital gains:

  • The Green Book clarifies that a $500,000 cap in the amount of deferred gain from a like-kind exchange would be applied to each taxpayer and that the limit for a married couple filing a joint return would be $1 million. The proposed effective date is set for exchanges completed in tax years beginning after 2021.
  • The Green Book proposes that the effective date of the increase in the maximum capital gains tax rate for those with income over $1 million would be for gains recognized after the date of announcement.  This appears to mean the date when the President first officially proposed the idea, April 28, 2021.

It is important to note that the President’s budget and tax proposals are not law, they are suggestions for Congress.  Congress will have its own ideas about appropriate funding levels for the federal government and how to raise the revenue needed to pay for any infrastructure bill that moves forward.  Many of the tax proposals to raise revenue will not be supported by Republicans and many Democrats will be skeptical as well.  Corporate tax increase proposals are more likely to be considered as viable by Democratic members of the tax-writing committees than rate increases on individuals.  Congress still has a long way to go before reaching any agreements.  NAR will continue to educate lawmakers about the importance of investing in housing as critical infrastructure in the US and the negative impact that proposed tax increases would have on the real estate economy, and especially on the commercial real estate sector’s recovery efforts.

FY 2022 Budget Summary – Real Estate-Related Provisions

Additional Resources

NAR's Letter to Secretary Yellen on Proposed Tax Amendmentspdf

President’s 2022 Budgetpdf

Treasury’s Green Bookpdf

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.
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