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“We can’t hold the [National Flood Insurance Program] hostage while lawmakers work out reforms,” Austin Perez, the National Association of REALTORS®’ legislative point person on the issue, told attendees on Friday at the REALTORS® Conference & Expo in Boston. “Every time the program lapses, 40,000 home sales a day can’t close.”
Federal flood insurance is critical for home sales throughout the United Sates, but long-term reauthorization faces hurdles because the program is losing an average of $1.5 billion a year. “Thirty counties account for 90 percent of that shortfall,” Perez said.
Also on NAR’s agenda is tax reform. REALTORS® won a huge victory earlier this year when the IRS said that real estate brokers are eligible for the new 20 percent pass-through income deduction, created as part of the Tax Cuts and Jobs Act last year, even though brokerage services are one of the specified types of businesses that face eligibility restrictions. NAR argued that the law didn’t intend to restrict brokerage services that deal with tangible assets like real estate.
Still unanswered, though, is how to treat rental property income. The law left it unclear whether people who are eligible for the deduction and own rental property can include rental proceeds as part of their eligible pass-through income. NAR and other groups are arguing that such income should be eligible. The IRS is expected to issue a decision before the end of the year.
In the long-term, NAR is gearing up for additional work in Congress and with the regulatory agencies on mortgage finance reforms, fair housing, and association health plans, among other items.