NAHB to Congress: Expanding the Net Investment Income Tax Will Increase Housing Costs
NAHB Chairman Jerry Konter sent a letter on July 15 to leaders in Congress expressing NAHB’s strong opposition to proposals to expand the Net Investment Income Tax (NIIT), stating such a move would be counterproductive because it would increase housing costs and put upward pressure on rents at a time when the nation is in the midst of a housing affordability crisis.
The NIIT is a 3.8% surtax on income, such as capital gains, interest, rental and royalty income, and dividends.
When the NIIT was enacted as part of the Affordable Care Act, Congress explicitly limited its applicability to passive investment income. However, proposals in Build Back Better, and recently reported to be under consideration in the Senate, would expand the NIIT to include active investment income.
“Subjecting active business income to the NIIT will result in higher housing costs…particularly for renters,” Konter wrote.