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With Friday marking 100 days since President Joe Biden took office, HousingWire reviewed the actions he’s taken on housing during that time \u2014 including yesterday’s announcement of a $1.8 trillion spending plan that would eliminate a \u201cspecial real estate tax break\u201d for certain investors.<\/p>\n
As a candidate, Biden proposed a $600 billion<\/a> housing plan aimed at improving affordability, ending discrimination, protecting consumers and improving energy efficiency. Of special note, the former vice president also said he would introduce a $15,000 tax credit for first-time homebuyers<\/a>, build millions of units of affordable housing and cap payments for certain renters<\/a>.<\/p>\n Here’s what he’s done so far.<\/p>\n One of the key planks of candidate Biden’s housing platform was the idea of a first-time homebuyer tax credit<\/a>. On April 26, United States Rep. Earl Blumenauer, D-Ore., and Rep. Jimmy Panetta, D-Calif., introduced new legislation called the \u201cFirst-Time Homebuyer Act.\u201d<\/a> The bill would provide a tax credit for first-time homebuyers of up to 10% of the home purchase price, or $15,000<\/a>. In order to be eligible for the full credit, potential buyers must not have owned or purchased a home within the past three years.<\/p>\n The program is targeted to low- and middle-income earners making no more than 160% of the area median income, and the home\u2019s purchase price must be no more than 110% of the area median purchase price. Borrowers could claim the credit for primary residences purchased after Dec. 31, 2020. The house has to be a primary residence for at least four years, or borrowers would face taxes to recover a portion of the credit.<\/p>\n Several weeks ago, a separate bill was introduced to bolster homeownership among those who experienced systemic housing discrimination. The down-payment assistance bill would provide $25,000<\/a> to first-time homebuyers, but only those who are also first-generation homebuyers and economically disadvantaged. David Dworkin, president of the National Housing Conference<\/strong>, told HousingWire<\/a> that multigenerational homeownership is a \u201cquintessential component of why and how people become homeowners.\u201d<\/p>\n In his first State of the Union address to Congress on Wednesday, Biden unveiled plans for his $1.8 trillion American Families Plan, which focuses on federal investment in education, child care and paid family leave. It’s essentially his second-half plan to boost the country’s economy, following his $1.9 trillion American Rescue Plan he signed into law last month. <\/p>\n Part of the American Families Plan is the elimination of 1031 exchanges in cases where the gains are more than $500,000. A 1031 exchange allows real estate investors to defer capital gains taxes by funneling the proceeds from a sold property into a new one.<\/p>\n The elimination of this program for high-income investors could cause them to hold on to properties for longer that they ever have before \u2014 and may have the effect of decreasing supply and demand. <\/p>\n To offset costs<\/a> for the American Families Plan, the Biden administration wants to raise the corporate tax rate from 21% to 28%, which, when combined with measures designed to stop offshoring of profits, would fund the entire plan within 15 years, according to the White House. <\/p>\n The tax hike would essentially roll back tax cuts from former President Donald Trump\u2019s 2017 bill, which capped the amount of state and local taxes (SALT)<\/a> that could be deducted from federal income taxes at $10,000.<\/p>\n Biden was, of course, elected during the height of the COVID-19 pandemic, as millions struggled to pay their mortgages or rent. He quickly moved to extend the federal eviction and foreclosure moratoriums<\/a> \u2014 twice \u2014 and distributed through Congress $27 billion in emergency housing vouchers and rent relief. <\/p>\n Biden has made a point to focus on rebuilding the country from the pandemic, but he’s also been pushing for the rehabilitation of affordable housing. Part of the $2 trillion American Rescue plan calls for the construction of 500,000 homes for low- and middle-income buyers, while also allocating $40 billion for the country\u2019s public housing system.<\/p>\n The post A look at Biden’s first 100 days and his impact on housing<\/a> appeared first on HousingWire<\/a>.<\/p>\nThe first-time homebuyer tax credit<\/strong> is now a bill<\/strong><\/h4>\n
The American Families Plan<\/strong> and 1031s<\/strong><\/h4>\n
COVID-19 response<\/strong><\/h4>\n
American Rescue Plan or Infrastructure Plan<\/h4>\n