TAXATION
Political
observers agree that significant federal income tax legislation is inevitable
in the next few years. Some of the factors driving the potential for major tax
changes include the continued expansion of the alternative minimum tax (AMT)-
rapid growth in unfunded liabilities facing Federal entitlement programs, and
the application of so called “pay-go” budget rules in which revenue-losing tax
legislation must be offset by either reductions in direct spending or by tax
increases. As a result, a variety of tax laws, including those affected by
commercial and residential real estate, could be reviewed with a focus
on raising revenue.
- Mortgage Interest Deduction: NAR opposes any changes that would
limit or undermine current law.
- Capital Gains Exemption: NAR opposes any changes to the
capital gains exemption on the sale of a home.
- Estate Tax Reform: NAR supports repeal of the estate
tax but opposes the portion of the repeal that requires the use of so-called
“carryover basis.” If the estate tax were to be revised, NAR supports the
lowest possible rate (but in no event a rate higher than the maximum individual
tax rates) and a substantial exclusion.
- Depreciation--Tenant Improvements:
NAR supports
efforts to establish a permanent rule that more accurately reflects the
depreciable lives of buildings and to conform amortization periods for tenant
improvements more closely to the term of the lease.
REAL ESTATE FINANCE
The
persistence and severity of America's
housing and mortgage finance crises have taken many observers by surprise,
prompting urgency regarding viable and necessary solutions. Delinquencies are
surging, home prices remain flat or in decline, and foreclosure rates continue
to rise. Federal policymakers are poised to take action weighing a number
of proposals aimed at laying
the groundwork for healthier housing and mortgage markets in the future.
- Government-Sponsored Enterprises: NAR is recommending that Fannie
Mae and Freddie Mac be converted into government-chartered, non-shareholder
owned authorities that are subject to tighter regulations on product, revenue
generation and usage, and retained portfolio practices in a way that ensures
they accomplish their mission and protect the taxpayer.
- Mortgage Loan Limits: NAR supports making the current
higher loan limits and formula permanent.
- Federal Housing Administration
Programs: NAR is
a strong supporter of the single- and multi-family programs administered by the
Federal Housing Administration (FHA).
- NAR Credit Policy: NAR is calling on the credit and
lending industries and federal regulators to reassess the entire mortgage
lending policy structure and look for ways to increase the availability of
credit to qualified borrowers who are good credit risks.
- Short Sales:
NAR continues to push the lending industry to expedite short sales.
-
Real Estate Settlement Procedures
Act (RESPA): NAR
supports HUD’s new RESPA rule in general. NAR supports transparency in the home
buying process and clear disclosures to consumers of loan terms and the fees
charged by settlement service providers. NAR supports better guidance from HUD
but specifically rejects HUD's contention that the marketing of home warranties
is a mere referral.
ENERGY AND THE ENVIRONMENT
NAR’s
commitment to the environment and energy efficiency is evident in its programs
to train Green REALTORS, support Smart Growth initiatives in communities
nationwide as well as its Washington,
D.C. office building, the first
privately-owned commercial building in the nation’s capital to be LEED Silver
certified. Development of public policy should be guided by market
principles and voluntary incentives which preserve private property rights,
ensure access to affordable property insurance and maintain housing
affordability and availability. Because environmental protection and
economic growth are not mutually exclusive, those policies should not erect
barriers to the ability to own, use or transfer property.
- National Flood Insurance
Program: NAR is
recommending renewing
and strengthening the long-term viability of the federal flood insurance
program including comprehensive coverage for non-primary residences (e.g.,
rental properties and second homes) and reforms to provide “full risk” premiums
for most repetitive loss structures in many states. NAR also supports funding
to update and improve the accuracy of flood maps, which are the cornerstone of
NFIP and are used to determine which properties require flood insurance.
ENERGY AND THE ENVIRONMENT
- Natural Disaster Policy: NAR supports a federal program that promotes the availability and
affordability of property insurance nationwide and coordinates the mitigation
of property against natural disasters as well as post-disaster assistance
- Energy Efficiency and
Climate Change NAR Supports: Improving energy efficiency through voluntary incentives
in lieu of individual building mandates. Commercially reasonable approaches
that advance market and smart-growth principles of protecting private property
rights and maintaining real estate affordability and availability. Additionally, NAR supports, educating
property owners and consumers about the benefits of energy efficiency. NAR Opposes: Requirements which impose
undue economic burdens on property owners or managers; triggering such
provisions at the time when real property is sold; and expanded application of
existing laws/regulations that are not suited to address climate change
COMMERCIAL REAL ESTATE
Having a
sound and well-functioning commercial and multifamily real estate sector is
critical to our country's
economic growth and development, and to millions of U.S. businesses of all sizes that
provide local communities with jobs and services. The overall economic downturn
and crisis in the broader financial markets is directly impacting not only the
fundamentals of commercial real estate finance, but also the outlook for
recovery.
- Commercial Real Estate Lending NAR supports protecting and
enhancing the flow of capital to commercial real estate. NAR believes Congress
should consider legislation aimed at improving commercial real estate markets.
These include increasing the cap on credit union member business lending (MBL)
and improving lending access through the passage of the Small Business Lending
Fund.
BUSINESS ISSUES & TECHNOLOGY
While the
business of real estate has traditionally been regulated at the state level,
NAR represents the interest of its members to ensure that federal legislation
and regulations support or do not needlessly hinder the ability of REALTORS®, realty firms, and REALTOR®
associations to conduct business.
-
Data Security: REALTORS® strongly
support efforts to protect their clients' sensitive personal information but
believe that any legislation must not overly burden small firms with limited
resources. In addition, any federal data security legislation should not
preempt state laws which may offer state residents additional protection.
-
Broadband Access: Access to high-speed broadband is
rapidly becoming an essential component of any community’s 21st Century
economic infrastructure. As a result,
Realtors® support national broadband policies designed to provide all American
communities with the affordable, high-capacity connectivity necessary to
support today’s businesses and workforce. NAR believes that a variety of
options should be considered to encourage broadband deployment, including
action by both the private and public sectors.
- Net Neutrality: The business of real estate is
increasingly conducted on-line. Streaming video, virtual tours and
voice-over-internet-protocol are just some of the technologies that are
commonly used by REALTORs® today. NAR
believes that Internet users should be in control of what Internet content is
accessed, the applications used, and the legal devices that they choose to
connect to the Internet. In addition, network providers should not be allowed
to discriminate among Internet data transmissions on the basis of the source of
the transmission as they regulate the flow of network content.
