UPDATE: Congress has adjourned for 2016 without extending the Mortgage Forgiveness Debt Act, which will now expire at the end of the year. Read our coverage here for the full story.
As part of a wider piece of tax legislation, Congress has voted to extended the Mortgage Forgiveness Debt Act to 2017.
Originally passed in 2007, the act protects underwater homeowners from incurring tax bills on the debt forgiven during a short sale. Three times now, the act has come close to expiring, but strong lobbying efforts NAR have managed to extend it.
Real Estate Tax Relief
In addition to extending the Mortgage Debt Relief Act, Congress’ tax legislation also included the following measures:
- A permanent extension of a 15-year cost recovery period for the depreciation of qualified leasehold improvements.
- The renewal of certain incentives to promote energy efficient commercial and multifamily buildings. Additionally, the legislation extends, for two years, an expired tax credit of between $1,000 and $2,000 for energy-efficient new homes.
- A permanent extension to rules allowing small–and mid–sized businesses to immediately expense business equipment, rather than depreciate the equipment over several years.
- Changes to the Foreign Investment in Real Property Tax Act (FIRPTA) that will ease restrictions on investment in commercial real estate.
Tom Salomone, NAR’s president, praised Congressional leaders in a release from the association.
“These tax extenders offer critical support for consumers, homeowners, commercial property investors and small businesses alike,” said Salomone. “A strong economy requires certainty, and this proposal gives a healthy dose of it to millions of American taxpayers.
“We’re grateful for the leadership shown on this important piece of legislation,” he continued, “and look forward to continuing our work in support of homeownership.”