The National Association of REALTORS® applauded the first draft of the Republican tax plan as “very positive” for real estate, citing five provisions that were high on NAR’s list of priorities. 

These included expanded or preserved deductions for state and local taxes (SALT), qualified business income and mortgage interest. The plan, which was released by Republicans on the House Ways and Means Committee on May 12, also extends President Trump’s 2017 tax cuts and preserves like-kind exchanges for real estate and most business SALT deductions. 

“This is a very strong opening bid for our advocacy priorities,” Executive Vice President and Chief Advocacy Officer Shannon McGahn said. “This draft language preserves or strengthens a raft of provisions vital to housing affordability, including making the current lower income tax brackets permanent. These are all measures we have worked tirelessly to advocate for on behalf of our members.” 

Specifically, the proposed legislation:  

• Expands the qualified business income deduction used by many Realtors from 20% to 23%. 

• Triples the SALT deduction cap from $10,000 to $30,000 for households earning under $400,000 per year. 

• Makes current individual tax rates permanent and indexes them for inflation. 

• Preserves the mortgage-interest deduction at its current level. 

• Leaves business SALT deductions largely untouched and preserves Section 1031 like-kind exchanges for business real estate and investment properties. 

NAR applauded other provisions of the tax plan as well, including a temporary increase in the child tax credit from $2,000 to $2,500, leaving the top tax rate at 37% and the estate and gift tax threshold at $15 million, and the inclusion of some provisions from the Low-Income Housing Tax Credit (LIHTC) Improvement Act. 

“While the early details are overwhelmingly positive for the real estate economy and small businesses, I would caution that this is just the first draft,” McGahn added. “The bill will continue to evolve as it moves through the committee process and eventual passage in the House and Senate, with many amendment votes to come.”