Bipartisan Praise for REALTOR® Role in Tax, Other Debates
December 6, 2017
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Senate Banking Committee member Heidi Heitkamp (D-N.D.) joined the National Association of REALTORS® at its Washington offices today to talk about tax reform, mortgage finance reform, and other issues. The two shared one important point of agreement: REALTORS® are playing a crucial role in the making of federal polices that affect real estate by providing the kind of realistic and useful input lawmakers need.
Big thanks to REALTORS®. Sen. Heidi Heitkamp (D-N.D.) championed the tax code's longstanding support of homeownership and praised REALTORS®' efforts to protect that during the tax reform debate.
“I want to applaud REALTORS® for what they did during the tax reform debate, because when you sit on the sidelines and hope things get better, that’s not a strategy,” Heitkamp said at a half-day event called “The Future of the U.S. Housing Market.”
Nobel Prize–winning economist Robert Shiller served as the keynote speaker for the event, which also featured NAR Chief Economist Lawrence Yun. Both shared their perspectives on the housing market with attendees.
Rep. Hensarling thanked REALTORS® for playing an instrumental role in the House passage of comprehensive flood insurance reform about a month ago.
“Thanks to NAR for negotiating in good faith to move that bill forward,” Hensarling said. The legislation would reauthorize federal insurance for five years, though the Senate hasn’t acted yet on it. Among other elements, NAR sought to ensure grandfathering provisions would be retained for certain properties to protect them against sudden rate increases. Congress also could reauthorize the insurance on a short-term basis until long-term reform is passed.
Hensarling said he hoped that type of cooperation would also be present when lawmakers take up reform of the government sponsored enterprises that create the secondary market for federally conforming home loans. “Hopefully [what NAR did] will serve as model for the GSE debate,” he said.
Both Heitkamp and Hensarling said lawmakers are continuing their focus on tax reform. Hensarling said he “enthusiastically” supports the bill currently in conference committee, and believes it will result in economic growth of more than 3 percent. That’s significantly higher than what it’s been during the recovery that started after the economic crash. That level of growth, along with lower tax rates, will help households better than anything government can do, he said.
More: Take action on tax reform.
Heitkamp took a dimmer view, saying the legislation goes against the priority the tax code has historically placed on homeownership. It does that, she said, by cutting or eliminating many of the deductions that households take today. “You can’t just talk about the mortgage interest deduction,” she said. She noted that while the MID is mostly preserved in both bills, the increase of the standard deduction will mean credit for mortgage payments will no longer factor into the tax picture of many homeowners. “You have to look at it in context of the other deductions.”
Learn more about NAR's position on tax reform.
Heitkamp praised NAR for its involvement in the tax bill. “Your folks have been working day and night, as aggressively and transparently as they can be, to get this fixed,” she said. NAR notched wins by getting the property tax deduction restored in the Senate version of tax reform, although it’s capped at $10,000, as in the House bill. And the association successfully made the case to leave current law in place for tax-deferred 1031 exchanges, an important tool for commercial property owners to defer capital gains when purchasing a like-kind property.
Going forward, NAR wants to keep current law in place for the MID, which means retaining the mortgage cap of $1 million and maintaining the capital gains exclusion on the proceeds of sale of a principal residence.
—Robert Freedman, REALTOR® Magazine
Updated: January 14, 2022