[Washington DC] – Early Saturday morning, the Senate passed the Tax Cuts and Jobs Act (H.R. 1) by a vote of 51 to 49. The tax reform bill makes several changes to the tax code, including to the mortgage interest deduction (MID). The House of Representatives passed their tax reform plan in November, which proposed more onerous provisions for home ownership incentives.
“While WDMA feels that the home ownership provisions of this bill need to be improved, the Senate has taken a step in the right direction compared to the House bill,” said WDMA President & CEO Michael O’Brien. “In particular, we are pleased that the Senate has retained the current $1 million cap for the MID, in addition to keeping the deduction for second homes. As Congress moves to reconcile the two bills, we urge the conference committee to protect the MID, including the ability to deduct interest for home equity loans, which are frequently used to replace windows and doors with energy-efficient replacements.”
Other provisions of the Senate-passed bill include cutting the corporate tax rate from 35% to 20%, and preserving the Historic Rehabilitation Tax Credit (HTC) at 20%. In the rush to get the bill passed, the Senate put the future of the Research and Development (R&D) tax credit into question, which will need to be resolved before a final version is adopted.
The House and Senate will now move to a conference committee to reconcile the two bills before sending a final bill to President Trump, who has indicated he will sign the bill into law. WDMA will continue to work with the House and Senate to ensure a final tax reform package is crafted to facilitate economic growth, in addition to including incentives for home ownership.