Apartment Industry Statement on “Big 6” Tax Reform Outline
WASHINGTON, D.C. — Statement from the National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) following the release of the tax reform outline by the “Big 6”:
“NMHC/NAA welcome the release of the Republican tax reform framework and applaud the efforts by lawmakers to develop pro-growth tax reform that will create jobs and spark economic growth. We look forward to discussing with Congress our members’ key issues in the proposal, and the impact of the package on the apartment industry and its potential to help solve America’s housing affordability crisis. The country needs 4.6 million more apartments by 2030 just to meet demand, and it’s critical that tax policy supports the production of that housing.
“As an industry largely made up of flow-through entities, we support a more competitive 25 percent pass-through rate and urge lawmakers to make sure all legitimate business income qualifies. Additionally, the framework’s cost recovery rules leave us hopeful a final bill will promote the development of multifamily housing. We are particularly pleased the framework leaves the decision regarding the deductibility of interest for pass-through entities to Congress. Full interest deductibility for all entities involved in real estate is crucial to the development of capital intensive multifamily buildings.
“NMHC/NAA also applaud policymakers for recognizing the critical role the Low-Income Housing Tax Credit (LIHTC) plays in driving the construction of housing that is affordable to low-income families. The commitment to retaining this incentive in any final tax package is clearly an initial step in the right direction, and we will work to ensure that tax reform does not inadvertently diminish this valuable tool.
“The apartment industry is critically important to communities across the country. Change must be carefully considered to those specific aspects of the tax code that have an outsized impact on the multifamily sector. Specifically, tax reform should:
- Protect flow-through entities;
- Retain the deduction for business interest;
- Maintain like-kind exchanges;
- Ensure depreciation rules avoid harming real estate;
- Preserve capital gains treatment of carried interest; and,
- Protect the Low-Income Housing Tax Credit (LIHTC).
“We will continue working with policymakers on the specific needs of our industry in tax reform so that we can continue serving the 39 million Americans who call apartments home and the 12.3 million jobs supported by the multifamily sector.”
More information about apartments and tax reform is available at protectthelease.com.
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For more than 20 years, the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC) have partnered on behalf of America’s apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of 170 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. Apartments and their 39 million residents support more than 12 million jobs and contribute $1.3 trillion to the economy.