PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
No official summary is available in the imported record yet.
People & committees
Rep. Smith, Adam [D-WA-9] · D–WA
Legislative record
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Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
Source last updated: Feb 25, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-02-27 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposal would impose new taxes on certain investment entities that pool investors’ money and own residential properties with one to four units. Larger covered entities would face an acquisition tax, and covered entities would face annual taxes on baseline holdings above declining limits. Owners liable for these taxes would also face specified interest and depreciation deduction restrictions. Organizational and property exceptions mean the proposal would not cover every landlord. Internal drafting discrepancies create uncertainty about some provisions’ operation.
The term applicable taxpayer means any applicable entity which— (A) manages funds pooled from investors, and (B) is a fiduciary with respect to such investors.
The term single-family residence means a residential property consisting of 1-to-4 dwelling units.
In the case of a hedge fund taxpayer, there is hereby imposed a tax on the acquisition of any newly acquired single-family residence
For purposes of this section, the term hedge fund taxpayer means, with respect to any taxable year, any applicable taxpayer which has $50,000,000 or more in net value or assets under management on any day during the taxable year.
In the case of an applicable taxpayer who fails to meet the requirements of subsection (b), there is hereby imposed a tax equal to the product of— (1) $5,000, and (2) the excess of— (A) the number of applicable single-family residences owned by the taxpayer as of the last day of the taxable year, over (B) the maximum permissible units for the taxable year.
the ninth taxable year beginning after the applicable date . . . 10 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 10 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date any taxable year beginning more than 9 years after the applicable date . . . 0 50.
The term applicable entity shall not include— (i) an organization which is described in section 501(c)(3) and exempt from tax under section 501(a), or (ii) an organization which is primarily engaged in the construction or rehabilitation of single-family residences and which offers such residences for sale in the ordinary course of business.
(B) such property is— (i) not rented or leased, and (ii) used as the principal residence (within the meaning of section 121) of any person who has an ownership interest in the applicable taxpayer
No deduction shall be allowed under this chapter for a taxable year with respect to interest paid or accrued on acquisition indebtedness with respect to any single-family residence if the owner of such single-family residence is liable for tax under chapter 50B for such taxable year.
Depreciation (1) In general Section 167 of the Internal Revenue Code of 1986 is amended
No deduction shall be allowed under this section for a taxable year with respect to a single-family residence if the owner of such single-family residence is liable for tax under chapter 50B for such taxable year.
(A) Single-family residence The term single-family residence has the meaning given such term under section 5000G(b). (B) Ownership The rules of section 5000G(c) shall apply for purposes of determining ownership.
Section 1 would name the measure the Humans over Private Equity for Homeownership Act, or HOPE for Homeownership Act.
This Act may be cited as the Humans over Private Equity for Homeownership Act or the HOPE for Homeownership Act .
The proposed taxes would cover partnerships, corporations, and real estate investment trusts only if they manage pooled investor funds and are fiduciaries with respect to those investors, subject to the bill’s exceptions.
The term applicable taxpayer means any applicable entity which— (A) manages funds pooled from investors, and (B) is a fiduciary with respect to such investors.
The term applicable entity means— (i) any partnership, (ii) any corporation, or (iii) any real estate investment trust.
The term applicable entity shall not include— (i) an organization which is described in section 501(c)(3) and exempt from tax under section 501(a), or (ii) an organization which is primarily engaged in the construction or rehabilitation of single-family residences and which offers such residences for sale in the ordinary course of business.
The proposal would exclude qualifying tax-exempt section 501(c)(3) organizations and organizations primarily engaged in building or rehabilitating these homes for sale in their ordinary business.
The term applicable entity shall not include— (i) an organization which is described in section 501(c)(3) and exempt from tax under section 501(a), or (ii) an organization which is primarily engaged in the construction or rehabilitation of single-family residences and which offers such residences for sale in the ordinary course of business.
The bill defines “hedge fund taxpayer” as a covered taxpayer with at least $50 million in net value or assets under management on any day of the tax year. The definition says it applies “for purposes of this section,” although other sections of the proposed chapter also use the term; this analysis does not treat that wording as corrected.
For purposes of this section, the term hedge fund taxpayer means, with respect to any taxable year, any applicable taxpayer which has $50,000,000 or more in net value or assets under management on any day during the taxable year.
5000E. Newly acquired single-family residences (a) In general In the case of a hedge fund taxpayer
The proposed definition of a single-family residence would include residential properties with one to four dwelling units, not just detached houses.
The term single-family residence means a residential property consisting of 1-to-4 dwelling units.
The property exceptions appear intended to exclude an unoccupied home acquired through foreclosure unless acquired by a hedge fund taxpayer, and a building that received a low-income housing tax credit unless owned by a hedge fund taxpayer. Their operation is uncertain because the exception introduction refers to an unmatched “clause (i)” and the hedge fund references point to section 5000F(d)(3), which instead defines disqualified sales.
A residential property shall not be treated as a residential property described in clause (i) if— (A) such property is unoccupied and acquired through foreclosure (other than such a residence acquired through foreclosure by a hedge fund taxpayer, as defined in section 5000F((d)(3))
(C) such property— (i) was a building with respect to which a credit was allowed under section 42 (relating to the low-income housing credit), and (ii) is not owned by a hedge fund taxpayer (as defined in section 5000F(d)(3)).
(3) Disqualified sale The term disqualified sale means any sale or transfer to— (A) a corporation or other entity engaged in a trade or business, or (B) an individual who owns any other single-family residence at the time of such sale or transfer.
Another proposed property exception covers a home that is not rented or leased and serves as the principal residence of someone with an ownership interest in the covered taxpayer. It shares the exception introduction’s unmatched reference to “clause (i).” The incorporated principal-residence rules are not supplied.
A residential property shall not be treated as a residential property described in clause (i) if—
(B) such property is— (i) not rented or leased, and (ii) used as the principal residence (within the meaning of section 121) of any person who has an ownership interest in the applicable taxpayer
A covered taxpayer would count as acquiring or owning a home when it acquires or holds a majority ownership interest. The rule would not require full ownership.
an applicable taxpayer shall be treated— (1) as acquiring a single-family residence if the applicable taxpayer acquires a majority ownership interest in the single-family residence, regardless of the percentage of that ownership interest, and (2) as owning a single-family residence if the applicable taxpayer owns a majority ownership interest in the single-family residence, regardless of the percentage of that ownership interest.
The proposed acquisition tax on a hedge fund taxpayer would equal the greater of 15% of the home’s defined purchase price or $10,000.
In the case of a hedge fund taxpayer, there is hereby imposed a tax on the acquisition of any newly acquired single-family residence equal to the greater of— (1) 15 percent of the purchase price, or (2) $10,000
The acquisition tax would cover homes acquired in tax years beginning after enactment. For this tax, “purchase price” would mean the home’s adjusted basis on the purchase date.
the term newly acquired single-family residence means any single-family residence which was acquired by the taxpayer in any taxable year which begins after the date of the enactment of this chapter.
the term purchase price means the adjusted basis of the newly acquired single-family residence on the date such residence is purchased.
Covered taxpayers exceeding their permitted year-end holdings would owe $5,000 for each excess applicable property. This provision imposes a tax consequence for exceeding the limit rather than an outright prohibition on retaining homes.
In the case of an applicable taxpayer who fails to meet the requirements of subsection (b), there is hereby imposed a tax equal to the product of— (1) $5,000, and (2) the excess of— (A) the number of applicable single-family residences owned by the taxpayer as of the last day of the taxable year, over (B) the maximum permissible units for the taxable year.
An applicable taxpayer meets the requirement of this subsection for any taxable year if the number of applicable single-family residences owned by the taxpayer as of the last day of the taxable year is equal to or less than the maximum permissible units determined with respect to such taxpayer for such taxable year.
For the excess-holdings tax, applicable properties would be those acquired on or before a baseline date. Normally, that date would be the last day of the first full tax year ending on or after enactment.
The term applicable single-family residence means any single-family residence which was acquired on or before the applicable date.
The term applicable date means— (i) the last day of the first full taxable year ending on or after the date of the enactment of this chapter, or (ii) in the case of any taxpayer described in subparagraph (B), the date provided in such subparagraph.
A covered taxpayer becoming a hedge fund taxpayer after not being one in the preceding tax year would use a different baseline date: the last day of that preceding tax year.
the applicable date means the last day of the taxable year immediately preceding the taxable year in which the taxpayer is described in such clause.
An applicable taxpayer is described in this clause with respect to any taxable year if— (I) such taxpayer was not a hedge fund taxpayer for the preceding taxable year, and (II) such taxpayer is a hedge fund taxpayer for such taxable year.
For the first full tax year beginning after the baseline date, the holdings limit would be 90% of baseline holdings for hedge fund taxpayers and 50 properties plus 90% of baseline holdings for other covered taxpayers. The percentage would fall by 10 percentage points each year through 10% in the ninth year. For tax years beginning more than nine years after the baseline date, the limits would remain zero for hedge fund taxpayers and 50 for other covered taxpayers; that final stage would not end the tax.
The maximum permissible units for a hedge fund taxpayer is— The maximum permissible units for any other applicable taxpayer is—
the first full taxable year beginning after the applicable date . . . 90 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 90 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the second taxable year beginning after the applicable date . . . 80 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 80 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the third taxable year beginning after the applicable date . . . 70 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 70 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the fourth taxable year beginning after the applicable date . . . 60 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 60 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the fifth taxable year beginning after the applicable date . . . 50 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 50 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the sixth taxable year beginning after the applicable date . . . 40 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 40 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the seventh taxable year beginning after the applicable date . . . 30 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 30 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the eighth taxable year beginning after the applicable date . . . 20 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 20 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date the ninth taxable year beginning after the applicable date . . . 10 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 10 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date any taxable year beginning more than 9 years after the applicable date . . . 0 50.
A sale or transfer to a corporation or other entity engaged in a trade or business, or to an individual who already owns another single-family residence, would be a “disqualified sale.” A home transferred in such a transaction would still be treated as owned by the seller at year-end for that tax year when applying the holdings requirement.
For purposes of applying paragraph (1), a single-family residence which is sold or transferred in a disqualified sale during the taxable year shall be treated as a single-family residence which is owned by the applicable taxpayer as of the last day of such taxable year.
The term disqualified sale means any sale or transfer to— (A) a corporation or other entity engaged in a trade or business, or (B) an individual who owns any other single-family residence at the time of such sale or transfer.
For the new tax chapter, persons grouped as a single employer under specified existing tax rules would be treated as one person. The bill would modify those grouping rules, including which activities count as a trade or business and how “component member” is defined. The referenced statutes are not supplied, so precisely which entities would be combined cannot be determined from this bundle.
all persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single person.
section 52(a) shall be applied by substituting component members for members
for purposes of applying section 52(b), the term trade or business shall include any activity treated as a trade or business under paragraph (5) or (6) of section 469(c) (determined without regard to the phrase To the extent provided in regulations in such paragraph (6)).
the term component member has the meaning given such term by section 1563(b), except that the determination shall be made without regard to section 1563(b)(2).
Section 3 would deny deductions for interest on acquisition indebtedness for a single-family residence when its owner is liable for tax under the proposed chapter that year. The operative restriction is tied to the owner’s liability, rather than expressly limited to the particular home that triggered it. Its precise scope is uncertain: the home-definition reference points to section 5000G(b), which defines hedge fund taxpayers, and the ownership reference points to section 5000G(c), which defines single-family residences; ownership rules appear in section 5000G(d).
No deduction shall be allowed under this chapter for a taxable year with respect to interest paid or accrued on acquisition indebtedness with respect to any single-family residence if the owner of such single-family residence is liable for tax under chapter 50B for such taxable year.
(B) Single-family residence The term single-family residence has the meaning given such term under section 5000G(b) (C) Ownership The rules of section 5000G(c) shall apply for purposes of determining ownership.
(b) Hedge fund taxpayer For purposes of this section, the term hedge fund taxpayer means
(c) Single-Family residence For purposes of this chapter— (1) In general The term single-family residence means a residential property consisting of 1-to-4 dwelling units.
(d) Acquisition; ownership For purposes of this chapter, an applicable taxpayer shall be treated—
The interest restriction would incorporate the acquisition-indebtedness definition in section 163(h)(3)(B), substitute “single-family residence (as defined in section 5000G(b))” for “qualified residence,” and disregard clause (ii) of the existing definition. The incorporated definition is not supplied, and the proposed cross-reference points to the hedge fund definition rather than the home definition. The full scope of qualifying debt therefore cannot be established from this text.
Section 163 of the Internal Revenue Code of 1986 is amended
The term acquisition indebtedness has the meaning given such term under subsection (h)(3)(B), determined— (i) by substituting single-family residence (as defined in section 5000G(b)) for qualified residence, and (ii) without regard to clause (ii) thereof.
(b) Hedge fund taxpayer For purposes of this section, the term hedge fund taxpayer means
Section 3 would also deny depreciation deductions under section 167 for single-family residences whose owners are liable for tax under the proposed chapter that year. This provision repeats the mismatched references to section 5000G(b) for the home definition and section 5000G(c) for ownership, creating uncertainty about its precise operation.
Depreciation (1) In general Section 167 of the Internal Revenue Code of 1986 is amended
No deduction shall be allowed under this section for a taxable year with respect to a single-family residence if the owner of such single-family residence is liable for tax under chapter 50B for such taxable year.
(A) Single-family residence The term single-family residence has the meaning given such term under section 5000G(b). (B) Ownership The rules of section 5000G(c) shall apply for purposes of determining ownership.
(b) Hedge fund taxpayer For purposes of this section, the term hedge fund taxpayer means
(c) Single-Family residence For purposes of this chapter— (1) In general The term single-family residence means a residential property consisting of 1-to-4 dwelling units.
(d) Acquisition; ownership For purposes of this chapter, an applicable taxpayer shall be treated—
The new tax provisions and both deduction restrictions would apply to tax years beginning after enactment. Their effective dates therefore depend on enactment and the taxpayer’s tax year, rather than a fixed calendar date; the excess-holdings schedule separately uses the applicable baseline date.
The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.
The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
the first full taxable year beginning after the applicable date . . . 90 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date 50 plus 90 percent of the number of applicable single-family residences owned by the taxpayer on the applicable date
The supplied official-actions snapshot, updated February 25, 2026, records introduction in the House and referral to the House Committee on Ways and Means on February 27, 2025. This snapshot does not establish subsequent legislative action or enactment.
Source snapshot updated 2026-02-25T09:06:31Z. 2025-02-27: Referred to the House Committee on Ways and Means. 2025-02-27: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-27. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified after reviewing the complete supplied introduced text. This conclusion is limited to that version and does not establish absence in other versions or accompanying materials, or any amendment’s attachment history.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified after reviewing the complete supplied introduced text. This conclusion is limited to that version and does not establish absence in other versions or accompanying materials. Formal earmark disclosure materials are not supplied.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
The complete supplied introduced text contains specific organizational and property exceptions to its main tax policy. The findings identify narrow exemptions warranting scrutiny; classification does not establish improper motives or economic outcomes.
Organizations described in section 501(c)(3) and exempt from tax under section 501(a) would be excluded from the applicable-entity definition. This expressly exempts that organizational category from the proposed chapter 50B taxes even if an organization otherwise satisfies the entity-type, pooled-investment, and fiduciary conditions. The referenced exemption requirements are not reproduced in the supplied source.
The term applicable taxpayer means any applicable entity which— (A) manages funds pooled from investors, and (B) is a fiduciary with respect to such investors.
The term applicable entity means— (i) any partnership, (ii) any corporation, or (iii) any real estate investment trust.
The term applicable entity shall not include— (i) an organization which is described in section 501(c)(3) and exempt from tax under section 501(a), or (ii) an organization which is primarily engaged in the construction or rehabilitation of single-family residences and which offers such residences for sale in the ordinary course of business.
Organizations primarily engaged in building or rehabilitating single-family residences for ordinary-course sale would be excluded from the applicable-entity definition. This gives a specific business category an exemption from the proposed ownership taxes even if it otherwise meets the covered-entity conditions.
The term applicable taxpayer means any applicable entity which— (A) manages funds pooled from investors, and (B) is a fiduciary with respect to such investors.
The term applicable entity shall not include— (i) an organization which is described in section 501(c)(3) and exempt from tax under section 501(a), or (ii) an organization which is primarily engaged in the construction or rehabilitation of single-family residences and which offers such residences for sale in the ordinary course of business.
The text provides a property exception for a home that is not rented or leased and is used as the principal residence of any person with an ownership interest in the covered taxpayer. This would favor covered entities holding homes occupied by their owners within the proposed tax policy. The exception’s precise operation is uncertain because its introduction references an unmatched “clause (i)” and the incorporated principal-residence rules are not supplied.
A residential property shall not be treated as a residential property described in clause (i) if—
(B) such property is— (i) not rented or leased, and (ii) used as the principal residence (within the meaning of section 121) of any person who has an ownership interest in the applicable taxpayer
The text provides property exceptions for unoccupied homes acquired through foreclosure and for buildings that received low-income housing tax credits, while withholding those exceptions from hedge fund taxpayers. These are special exclusions within the ownership-tax policy benefiting otherwise covered taxpayers outside that category. Their precise operation is uncertain because the exception introduction has an unmatched reference and the hedge fund references point to the disqualified-sale definition.
A residential property shall not be treated as a residential property described in clause (i) if— (A) such property is unoccupied and acquired through foreclosure (other than such a residence acquired through foreclosure by a hedge fund taxpayer, as defined in section 5000F((d)(3))
(C) such property— (i) was a building with respect to which a credit was allowed under section 42 (relating to the low-income housing credit), and (ii) is not owned by a hedge fund taxpayer (as defined in section 5000F(d)(3)).
(3) Disqualified sale The term disqualified sale means any sale or transfer to— (A) a corporation or other entity engaged in a trade or business, or (B) an individual who owns any other single-family residence at the time of such sale or transfer.
Full text preserved for this analysis. Legislative record snapshot: Feb 25, 2026. How PlainBill uses AI