T
he National Association of REALTORS (NAR) is urging lawmakers to extend provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which benefits homeowners and the real estate economy. As some provisions are set to expire on December 31, NAR sees an opportunity to educate new members of Congress about the law's impact on consumers and why certain real estate provisions should be included.

    At NAR's Policy Forum, lawmakers and housing trade leaders discussed how tax reform can continue to elevate the American Dream. Sara Lipnitz, NAR VP of Advocacy, emphasized that the tax code should incentivize homeownership, and the TCJA has been a key driver in boosting it.

    Key provisions set to expire include lower income tax brackets, larger child tax credits, and a 20% deduction on qualified business income. Barbara Angus, former chief tax counsel to Republicans on the House Ways and Means Committee, argued that letting taxes rise on families or small businesses would be counterproductive.

    Panelists also discussed potential changes to the state and local tax (SALT) deduction and capital gains exclusion. The TCJA limited the SALT deduction to $10,000 for both single and married filers and preserved prior law on capital gains exclusions. Anna Taylor, deputy leader of Deloitte's Tax Policy Group, predicted that Congress will find middle ground on increasing the SALT cap.

    Ryan Ellis, former director of Americans for Tax Reform, urged lawmakers to double the exemption for capital gains on primary residences, which has been halved in real value since 1998. He argued that this change would boost housing supply by incentivizing older homeowners to sell their properties and allowing younger families to buy them.

    Extending the TCJA is estimated to cost between $4 trillion and $5 trillion over a decade, but it can pass through budget reconciliation with only a simple majority in both houses. While Republicans have an advantage, the process may be delayed due to vacancies in the House and potential leverage from some Republicans to attach their own priorities.

    Speakers emphasized that getting the bill done by Memorial Day is unrealistic, and Adam Carasso, former tax counsel to Democrats on the Senate Finance Committee, predicted it will take "a few go-arounds."