HOMES Act

New tax limits for large landlords

This bill would deny common tax deductions for large owners of small rental homes. It would bar depreciation and any interest deduction for a “disqualified” owner who owns 50 or more single‑family rental properties. "Single family" means properties with four or fewer units; properties that get the federal low‑income housing credit and certain new construction are excluded. The bill would also stop those owners from capitalizing the disallowed interest into the property cost. An exception would let deductions apply in the taxable year of sale only if the buyer is an individual who will use it as their principal residence or a qualified nonprofit that preserves affordable housing. The depreciation rule would apply to property placed in service in tax years after enactment and the interest rule would apply to indebtedness incurred in tax years after enactment. The bill would treat related entities as one owner for the test and direct Treasury to issue rules to prevent avoidance.