H.R. 1745 — HOPE for Homeownership Act

This section establishes a new Chapter 50B of the Internal Revenue Code imposing two excise taxes on certain taxpayers owning single-family residences. First, §5000E imposes a tax on hedge fund taxpayers acquiring any newly acquired single-family residence (i.e., acquired in taxable years beginning after enactment) equal to the greater of 15% of the purchase price (i.e., adjusted basis on purchase date) or $10,000. Second, §5000F imposes an annual tax on applicable taxpayers equal to $5,000 multiplied by the excess of applicable single-family residences (i.e., those acquired on or before the applicable date, generally the last day of the first full taxable year after enactment) owned at year-end over the maximum permissible units, treating disqualified sales during the year as owned. Maximum permissible units phase down over nine full taxable years after the applicable date as follows: (1) hedge fund taxpayers from 90% of applicable residences owned on the applicable date to 0; and (2) other applicable taxpayers from 50 plus 90% of applicable residences owned on the applicable date to 50. (Thus, the provision requires hedge fund taxpayers to divest all pre-applicable date holdings over nine years and other applicable taxpayers to reduce to 50 units, with taxes on failures to comply or on disqualified sales.)

This section disallows, for taxpayers liable for tax under chapter 50B (i.e., covered taxpayers), (1) the deduction for interest paid or accrued on acquisition indebtedness secured by single-family residences and (2) the depreciation deduction with respect to single-family residences. The amendments to IRC §§163 and 167 apply to taxable years beginning after the date of enactment.