119-hr1745

[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.
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