Last week, the National Multifamily Housing Council (NMHC) published an article examining the recent tax reforms proposed by the Trump Administration. The article provides a visual breakdown of how Trump’s tax plan compares to current tax laws and the House Republican Tax Blueprint.
A number of principles from each proposal have potential to make a significant impact on multifamily housing and investment. For example, one principle from the House Republican Tax Blueprint proposes to eliminate the Low-Income Housing Tax Credit (LIHTC), a program responsible for financing almost 3 million apartments and serving over 13 million residents since 1986. Contrary to elimination, the NMHC is insisting lawmakers expand the program by 50 percent. Also, the House Republican Tax Blueprint would tax investment income only 16.5 percent, rather than the current 20 percent plus 3.8 percent on net investment income.
The Trump Administration have some impactful provisions outlined, as well. A proposed 15 percent tax rate for all business would be 10 percent lower than the House Republican’s proposed maximum rate of 25 percent, and a whopping 24.6 percent below the current maximum business tax rate of 39.6 percent. Furthermore, the Trump proposal looks to eliminate the estate tax and cut individual tax rates by consolidating today’s seven tax brackets down to three.
Tax reform was scheduled for the August recess but has been postponed until later this year.