flexiblefullpage
Currently Reading

President Trump Signs Tax Extenders Into Law

Advertisement
billboard
Government + Policy

President Trump Signs Tax Extenders Into Law

NAHB Policy Briefing | Tax extenders are temporary provisions in the tax code that have expired and have to be cleared by Congress retroactively each year in order for filers to take them / Single-family home starts data


By National Association of Home Builders February 4, 2020
President Trump signs bill into law at White House
Just before the holiday recess, President Trump signed into law a tax package that includes a number of popular housing-related tax extenders. | Photo: Wikimedia Commons / Office of the President of the United States
This article first appeared in the February 2020 issue of Pro Builder.

The bill signed by President Trump contained several temporary tax items that expired at the end of 2017. The new law extends them through 2020, and also retroactively for 2018 and 2019. 

Working with Congress, NAHB pushed for the following provisions: 

• A mortgage insurance deduction that gives taxpayers credit for premiums paid for private mortgage insurance and FHA/RHA/VA insurance premiums. An income cap starting at $100,000 applies.

• The Mortgage Forgiveness Tax Relief Act, which eliminates any taxes homeowners may face after renegotiating the terms of a mortgage loan that resulted in forgiveness or cancellation of all or part of the outstanding loan balance on a principal residence.

• The Section 45L new energy-efficient home credit provides a $2,000 tax credit to builders for the construction of homes that exceed heating and cooling energy standards by 50%. Builders must have tax basis in the home, meaning they must own and then sell or lease it, to claim the credit.

• The Section 25C tax credit for qualified energy-efficiency improvements provides a credit worth up to $500 for consumers to install qualified energy-efficient upgrades.

• The Section 179D commercial buildings energy-efficiency tax deduction delivers a deduction of up to $1.80 per square foot for commercial and multifamily buildings that exceed specific energy-efficiency requirements under ASHRAE 2007.

 

Single-Family Home Production Can't Keep Up

After record numbers of builders left the industry during the Great Recession, production has not kept pace with demand. 

Single-family home starts of 6.8 million over the past 10 years were far lower than the numbers seen in the half century prior to the downturn and are barely half of the 12.3 million homes started during the previous decade. The figures are more striking given the U.S. population increase over the period. Also, despite adding nearly 1 million jobs to the sector since a low in 2011, overall job numbers in construction have yet to fully recover.

chart showing single-family housing starts by decade

 

Years of population growth and household formations, along with reduced levels of home building, have produced a critical supply shortage. Yet surveys show homeownership remains a goal for many consumers across all segments.

NAHB studied the paradox of declining inventory, rising prices, and underperforming single-family construction over the last decade and found the lack of building is rooted in supply-side headwinds that limit construction in expanding markets. The decline is tied to challenges related to the five L’s: labor, lots/land, lumber/materials, lending, and laws/regulatory burdens.

 

Access a PDF of this article in Pro Builder's February 2020 digital edition

 

Advertisement
leaderboard2
Written By

The National Association of Home Builders (NAHB) is a Washington, D.C.-based trade association representing more than 140,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing, and other aspects of residential and light commercial construction. For more, visit nahb.orgFacebook.com/NAHBhomeTwitter.com/NAHBhome

Related Stories

Government + Policy

How a Government Shutdown Could Affect the Housing Market

A federal government shutdown could have a small but noticeable impact on the U.S. housing market, particularly in the D.C. metro area

Government + Policy

Lapse in National Flood Insurance Program Looms

If the program is allowed to expire on Sept. 30, both the mortgage industry and housing will feel the repercussions

Housing Policy + Finance

The Fed Presses Pause, but Experts Issue a Hawkish Warning

The Federal Reserve maintained its federal funds rate in September, but experts warn the pause will be temporary

Advertisement
boombox2

Top Articles

Advertisement
boombox1
Advertisement
native1
halfpage2

More in Category

COVID-19 may be easing its grip on the U.S. after a disastrous two years, but lingering supply chain disruptions have builders holding onto their pandemic business tactics

An archive of NHQA-winning companies that represent home building's best in Total Quality Management

Don’t let the current hype about single-family B2R communities obscure the need to create long-term sustainability and asset value

Advertisement
native2
Advertisement
halfpage1

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.