S. 3754 would impose a new federal tax on large investors who purchase single-family homes, designed to discourage institutional investors from buying up residential properties and making them unavailable for individual homeowners. The tax would apply tiered rates based on portfolio size: 1 percent for investors owning 15-25 homes, 3 percent for those owning 25-100 homes, and 5 percent for those owning over 100 homes, with exemptions for nonprofits focused on affordable housing, government entities, and community land trusts. The bill would take effect for purchases made after December 31, 2025, and would generate revenue by requiring investors to report their home holdings and purchases annually. The revenues collected would be directed to affordable housing programs, with 65 percent going to the Housing Trust Fund and 35 percent to the Capital Magnet Fund, both programs that support affordable housing development and preservation. The legislation would also increase minimum funding allocations to smaller states for housing assistance.
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