Podcast: One Big, Beautiful Podcast – NAHB Talks Tax Bill

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by AVP of Government Affairs J.P. Delmore to dive into the “big, beautiful” tax bill that’s been introduced.

The Tax Cuts and Jobs Act from 2017 was a key victory for NAHB when it passed. However, unlike in 2017 — where NAHB successfully fought for a number of cuts — this time around, NAHB is fighting to keep the wins we gained in that initial bill.

“It doesn’t feel like you’re getting anything,” Delmore noted, “but in reality, we are trying to avoid something being taken away.”

Although NAHB will be playing some defense throughout this process, there are some initial offensive wins to highlight, such as the Low-Income Housing Tax Credit, with provisions that will greatly expand resources and the availability of affordable rental housing, especially in rural areas.

“Overall, this is a really good tax bill,” Delmore stated, in terms of the concerns NAHB had going in and that fact that they do not appear in the initial bill.

“Now, we still have a long way to go,” he added. “This has to go to the House floor. It has to go into the Senate and go through that process … but this is a much better start than a lot of us expected to see.”

Key items include:

• Individual state and local tax (SALT) limit would increase from $10,000 up to $15,000 for singles and $30,000 for couples (with some phaseouts for high earners).
• Business SALT was not included, meaning that businesses can deduct property taxes paid to state or local governments in full.
• The Tax Cuts and Jobs Act would be made permanent, including the tax rate structure and increased exemptions for the Alternative Minimum Tax.
• The Section 199A Qualified Business Income Deduction, which helps provide tax parity for pass-through entities, would be enhanced by increasing the deduction from 20% to 23%.
• The estate tax exemption would increase to $15 million.
• 100% bonus depreciation would be restored.
• Opportunity Zones would be extended.

Housing tax incentives for taxpayers will remain the same, including mortgage interest deductions, second homes and capital gains. Standard deductions will also become permanent, but with additional increases for a handful of years — $1,000 for singles and $2,000 for couples from 2025-2028.

“[Those standard deduction increases] will be offset a little bit by the increased SALT deduction cap,” Delmore added.

NAHB will continue to look for opportunities to increase the homeowner tax incentives.

NAHB will also be fighting for energy tax credits — specifically the Section 45L, Section 25D and Section 48E — which would be either eliminated at the end of the year or phased out more quickly than initially expected. NAHB will be pushing back on the end date to allow time for members to make appropriate adjustments for their businesses.

“[45L] is particularly problematic, as the Inflation Reduction Act had it going through 2032,” Delmore explained. “So a lot of our members made business decisions and business investments based on the fact that this was going to be a long-term tax credit out there. And now they have six-and-a-half months to wrap it all up and put a bowtie on it? I don’t think that’s fair.”

There are still several hurdles that the bill will need to overcome — both within the House and the Senate — with the administration’s aggressive goal to finalize the bill by July 4. NAHB will continue to keep members apprised of any updates.

NAHB’s Legislative Conference on June 11 offers members the opportunity to talk about these and other key issues impacting the home building industry, such as energy codes and labor shortages. Learn more at nahb.org.

Listen to the full episode of the podcast below and subscribe to Housing Developments through your favorite podcast provider, or watch all the episodes on YouTube.