H.R. 1745

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1745 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 1745

To amend the Internal Revenue Code of 1986 to impose an excise tax on 
the failure of certain hedge funds owning excess single-family 
residences to dispose of such residences, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 27, 2025

Mr. Smith of Washington (for himself and Ms. Sanchez) introduced the 
following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to impose an excise tax on 
the failure of certain hedge funds owning excess single-family 
residences to dispose of such residences, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Humans over Private Equity for 
Homeownership Act'' or the ``HOPE for Homeownership Act''.

SEC. 2. EXCISE TAX ON CERTAIN TAXPAYERS FAILING TO SELL EXCESS SINGLE-
FAMILY RESIDENCES.

(a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new chapter:

``CHAPTER 50B--EXCESS SINGLE-FAMILY RESIDENCES

``Sec. 5000E. Newly acquired single-family residences.
``Sec. 5000F. Excess single-family residences.
``Sec. 5000G. Definitions and other special rules.

``SEC. 5000E. NEWLY ACQUIRED SINGLE-FAMILY RESIDENCES.

``(a) In General.--In the case of a hedge fund taxpayer, there is 
hereby imposed a tax on the acquisition of any newly acquired single-
family residence equal to the greater of--
``(1) 15 percent of the purchase price, or
``(2) $10,000
``(b) Newly Acquired Single-Family Residence.--For purposes of this 
section, the term `newly acquired single-family residence' means any 
single-family residence which was acquired by the taxpayer in any 
taxable year which begins after the date of the enactment of this 
chapter.
``(c) Purchase Price.--For purposes of this section, the term 
`purchase price' means the adjusted basis of the newly acquired single-
family residence on the date such residence is purchased.

``SEC. 5000F. EXCESS SINGLE-FAMILY RESIDENCES.

``(a) In General.--In the case of an applicable taxpayer who fails 
to meet the requirements of subsection (b), there is hereby imposed a 
tax equal to the product of--
``(1) $5,000, and
``(2) the excess of--
``(A) the number of applicable single-family 
residences owned by the taxpayer as of the last day of 
the taxable year, over
``(B) the maximum permissible units for the taxable 
year.
``(b) Requirement.--
``(1) In general.--An applicable taxpayer meets the 
requirement of this subsection for any taxable year if the 
number of applicable single-family residences owned by the 
taxpayer as of the last day of the taxable year is equal to or 
less than the maximum permissible units determined with respect 
to such taxpayer for such taxable year.
``(2) Special rule for certain sales.--For purposes of 
applying paragraph (1), a single-family residence which is sold 
or transferred in a disqualified sale during the taxable year 
shall be treated as a single-family residence which is owned by 
the applicable taxpayer as of the last day of such taxable 
year.
``(c) Maximum Permissible Units.--The maximum permissible units 
with respect to any applicable taxpayer for any taxable year shall be 
determined as follows:

----------------------------------------------------------------------------------------------------------------
The maximum permissible units for a The maximum permissible units for
``In the case of-- hedge fund taxpayer is-- any other applicable taxpayer is--
----------------------------------------------------------------------------------------------------------------
the first full taxable year 90 percent of the number of 50 plus 90 percent of the number of
beginning after the applicable date applicable single-family residences applicable single-family residences
. . . owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the second taxable year beginning 80 percent of the number of 50 plus 80 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the third taxable year beginning 70 percent of the number of 50 plus 70 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the fourth taxable year beginning 60 percent of the number of 50 plus 60 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the fifth taxable year beginning 50 percent of the number of 50 plus 50 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the sixth taxable year beginning 40 percent of the number of 50 plus 40 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the seventh taxable year beginning 30 percent of the number of 50 plus 30 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the eighth taxable year beginning 20 percent of the number of 50 plus 20 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
the ninth taxable year beginning 10 percent of the number of 50 plus 10 percent of the number of
after the applicable date . . . applicable single-family residences applicable single-family residences
owned by the taxpayer on the owned by the taxpayer on the
applicable date applicable date
any taxable year beginning more than 0 50.
9 years after the applicable date .
. .
----------------------------------------------------------------------------------------------------------------

``(d) Definitions.--For purposes of this section--
``(1) Applicable single-family residence.--The term 
`applicable single-family residence' means any single-family 
residence which was acquired on or before the applicable date.
``(2) Applicable date.--
``(A) In general.--The term `applicable date' 
means--
``(i) the last day of the first full 
taxable year ending on or after the date of the 
enactment of this chapter, or
``(ii) in the case of any taxpayer 
described in subparagraph (B), the date 
provided in such subparagraph.
``(B) Taxpayers changing status.--
``(i) In general.--In the case of any 
applicable taxpayer described in clause (ii), 
the applicable date means the last day of the 
taxable year immediately preceding the taxable 
year in which the taxpayer is described in such 
clause.
``(ii) Applicable taxpayer described.--An 
applicable taxpayer is described in this clause 
with respect to any taxable year if--
``(I) such taxpayer was not a hedge 
fund taxpayer for the preceding taxable 
year, and
``(II) such taxpayer is a hedge 
fund taxpayer for such taxable year.
``(3) Disqualified sale.--The term `disqualified sale' 
means any sale or transfer to--
``(A) a corporation or other entity engaged in a 
trade or business, or
``(B) an individual who owns any other single-
family residence at the time of such sale or transfer.

``SEC. 5000G. DEFINITIONS AND OTHER SPECIAL RULES.

``(a) Applicable Taxpayer.--For purposes of this chapter--
``(1) In general.--The term `applicable taxpayer' means any 
applicable entity which--
``(A) manages funds pooled from investors, and
``(B) is a fiduciary with respect to such 
investors.
``(2) Applicable entity.--
``(A) In general.--The term `applicable entity' 
means--
``(i) any partnership,
``(ii) any corporation, or
``(iii) any real estate investment trust.
``(B) Exceptions.--The term `applicable entity' 
shall not include--
``(i) an organization which is described in 
section 501(c)(3) and exempt from tax under 
section 501(a), or
``(ii) an organization which is primarily 
engaged in the construction or rehabilitation 
of single-family residences and which offers 
such residences for sale in the ordinary course 
of business.
``(b) Hedge Fund Taxpayer.--For purposes of this section, the term 
`hedge fund taxpayer' means, with respect to any taxable year, any 
applicable taxpayer which has $50,000,000 or more in net value or 
assets under management on any day during the taxable year.
``(c) Single-Family Residence.--For purposes of this chapter--
``(1) In general.--The term `single-family residence' means 
a residential property consisting of 1-to-4 dwelling units.
``(2) Exceptions.--A residential property shall not be 
treated as a residential property described in clause (i) if--
``(A) such property is unoccupied and acquired 
through foreclosure (other than such a residence 
acquired through foreclosure by a hedge fund taxpayer, 
as defined in section 5000F((d)(3)),
``(B) such property is--
``(i) not rented or leased, and
``(ii) used as the principal residence 
(within the meaning of section 121) of any 
person who has an ownership interest in the 
applicable taxpayer, or
``(C) such property--
``(i) was a building with respect to which 
a credit was allowed under section 42 (relating 
to the low-income housing credit), and
``(ii) is not owned by a hedge fund 
taxpayer (as defined in section 5000F(d)(3)).
``(d) Acquisition; Ownership.--For purposes of this chapter, an 
applicable taxpayer shall be treated--
``(1) as acquiring a single-family residence if the 
applicable taxpayer acquires a majority ownership interest in 
the single-family residence, regardless of the percentage of 
that ownership interest, and
``(2) as owning a single-family residence if the applicable 
taxpayer owns a majority ownership interest in the single-
family residence, regardless of the percentage of that 
ownership interest.
``(e) Aggregation Rules.--
``(1) In general.--For purposes of this chapter, all 
persons which are treated as a single employer under 
subsections (a) and (b) of section 52 shall be treated as a 
single person.
``(2) Modifications.--For purposes of this subsection--
``(A) section 52(a) shall be applied by 
substituting `component members' for `members', and
``(B) for purposes of applying section 52(b), the 
term `trade or business' shall include any activity 
treated as a trade or business under paragraph (5) or 
(6) of section 469(c) (determined without regard to the 
phrase `To the extent provided in regulations' in such 
paragraph (6)).
``(3) Component member.--For purposes of this paragraph, 
the term `component member' has the meaning given such term by 
section 1563(b), except that the determination shall be made 
without regard to section 1563(b)(2).''.
(b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

``Chapter 50B--Excess Single-family Residences''.

(c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment of this 
Act.

SEC. 3. DISALLOWANCE OF MORTGAGE INTEREST AND DEPRECIATION IN 
CONNECTION WITH SINGLE FAMILY RESIDENCES OWNED BY COVERED 
TAXPAYERS.

(a) Mortgage Interest.--
(1) In general.--Section 163 of the Internal Revenue Code 
of 1986 is amended by redesignating subsection (n) as 
subsection (o) and by inserting after subsection (m) the 
following new subsection:
``(n) Certain Interest Paid by Covered Taxpayers.--
``(1) In general.--No deduction shall be allowed under this 
chapter for a taxable year with respect to interest paid or 
accrued on acquisition indebtedness with respect to any single-
family residence if the owner of such single-family residence 
is liable for tax under chapter 50B for such taxable year.
``(2) Definitions.--For purposes of this subsection--
``(A) Acquisition indebtedness.--The term 
`acquisition indebtedness' has the meaning given such 
term under subsection (h)(3)(B), determined--
``(i) by substituting `single-family 
residence (as defined in section 5000G(b))' for 
`qualified residence', and
``(ii) without regard to clause (ii) 
thereof.
``(B) Single-family residence.--The term `single-
family residence' has the meaning given such term under 
section 5000G(b)
``(C) Ownership.--The rules of section 5000G(c) 
shall apply for purposes of determining ownership.''.
(2) Effective date.--The amendments made by this subsection 
shall apply to taxable years beginning after the date of the 
enactment of this Act.
(b) Depreciation.--
(1) In general.--Section 167 of the Internal Revenue Code 
of 1986 is amended by redesignating subsection (i) as 
subsection (j) and by inserting after subsection (h) the 
following new subsection:
``(i) Deduction Disallowed for Disqualified Single Family Property 
Owners.--
``(1) In general.--No deduction shall be allowed under this 
section for a taxable year with respect to a single-family 
residence if the owner of such single-family residence is 
liable for tax under chapter 50B for such taxable year.
``(2) Definitions.--For purposes of this subsection--
``(A) Single-family residence.--The term `single-
family residence' has the meaning given such term under 
section 5000G(b).
``(B) Ownership.--The rules of section 5000G(c) 
shall apply for purposes of determining ownership.''.
(2) Effective date.--The amendments made by this subsection 
shall apply to taxable years beginning after the date of the 
enactment of this Act.
<all>