NAR: Federal Budget Deal Includes Several Pro-Real Estate Provisions
Real Estate In-Depth | February 2018
WASHINGTON—The National Association of Realtors reported on Feb. 9, shortly after President Donald Trump signed the federal budget deal, that the agreement includes a number of benefits for the real estate industry, including a temporary extension of federal flood insurance and the extension of NAR-backed tax provisions that range from debt forgiveness relief, mortgage insurance premiums deductibility and several energy-efficiency related provisions.
The federal budget agreement includes a provision that extends the National Flood Insurance Program until March 23, giving lawmakers time to work out a longer extension that could last until Sept. 30, NAR reports. It also adds $27 billion in mitigation and resiliency funds to address issues arising from last year’s hurricanes. The extension makes $12 billion available under the Community Development Block Grant program to fund U.S. Army Corp. of Engineers flood mitigation projects.
The agreement retroactively extends mortgage debt forgiveness, mortgage insurance premiums deductions and energy efficient commercial building deductions for the 2017 tax year.
The mortgage debt forgiveness provision will prevent homeowners who were forced to sell their home through a short-sale last year, or who faced a foreclosure, from being taxed on the “phantom income” they received when a lender cancelled their debt, according to the NAR report.
The deduction for mortgage insurance premiums provision allows approximately four million homeowners to deduct the mortgage insurance premiums they paid as part of their mortgage. NAR estimates that roughly two million homebuyers annually purchase a home that is subject to mortgage insurance. This provision also helps make homeownership more affordable for first time and entry-level homeowners, according to NAR.
Another provision in the federal budget agreement extends the energy efficient commercial buildings deduction for the cost, up to $1.80 per –square-foot, of energy-efficient commercial building property.
The budget also extends the nonbusiness energy property credit, the residential energy efficiency property credit and the credit for energy-efficient new homes.
All tax provision extensions are only for 2017, according to NAR.