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After 75 years, NAHB rethinks strong stance on the mortgage interest tax deduction

One of the top lobbyists against cutting the MID changes its mind

The National Association of Home Builders changed its stance on one of the most highly debated homeownership conversations: the importance of the mortgage interest tax deduction.

“This is the first time in NAHB’s 75-year history that we have been open to the idea of broader options regarding housing tax incentives,” said Granger MacDonald, NAHB chairman and a builder and developer from Kerrville, Texas. “Now is the time to reform tax policy, and housing will not be left behind in this process.”

As one of the top lobbyists on Capitol Hill, for NAHB to put out an announcement on what it thinks about the MID is a big deal.

One of the only other housing groups that’s as vocal on the importance of the MID is the National Association of Realtors.

And to put in perspective exactly how much NAHB supported the MID, back in June, NAHB kicked off National Homeownership month by voicing its concerns over the House Republicans’ tax plan, which threatened the future of the MID. NAHB stressed that the mortgage interest deduction has been a cornerstone of American housing policy since the inception of the tax code.

But after President Donald Trump announced his new tax plan, which doubled the standard deduction and eliminated state and local tax deductions, such as property taxes, NAR stuck by it’s same stance that this spells bad news, and NAHB didn’t.

In a press release, NAHB said they voted to revise its policy regarding the nation’s tax code in light of recent discussions on tax reform between congressional leadership and the Trump administration.

“Today’s vote gives NAHB greater flexibility as the tax debate unfolds and stakeholders seek consensus to shape a tax code that best serves the nation’s consumers and small businesses,” the release stated.

In a follow-up interview with HousingWire on the news, Jim Tobin, NAHB chief lobbyist and head of government affairs, said, “Starting back with the release of the Republican blueprint about a year and a half ago, it’s been clear to us that tax policy is changing.”

While NAHB has concerns with the doubling of the standard deduction, Tobin explained, “For us, it’s an opportunity for our industry to remain flexible in its ability to respond to potential changes down the road.”

“For 75 years, we’ve been bound to supporting the MID. These are changing times and our members want us to be flexible,” he said.

As the Trump administration continues to work through tax reform, NAHB will be ready to weigh in on the discussion.

Rather than tie themselves to the MID, NAHB said the tax policies they are promoting includes:

  • A homeownership tax incentive;
  • The low-income housing tax credit, along with additional resources to meet the affordability crisis;
  • Tax incentives for remodeling, including energy efficiency tax credits;
  • The exclusion of capital gains on the sale of a principal residence; and
  • Business interest deductions for small businesses.

Tobin noted that although they haven’t seen any concrete proposals, the administration has clearly stated that they want homeownership to be a priority going forward.

As a guardian of housing tax incentives, Tobin said that it is incumbent of NAHB to keep defining that incentive and ensure to homeowners that housing policy is still supported.

He added that due to the doubling of the standard deduction, it means that a very small amount of the homeowner population will be able to use the deduction if it was enacted as is.

“Right now, the MID is a middle class tax break that helped people buy and afford the home they already purchased,” said Tobin.

For NAHB, he said the main objective is to preserve the true meaning and intention behind the mortgage interest deduction.

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