Flood Insurance Extension, Real Estate Tax Extenders are Key Pieces of New Federal Funding Bill
December 19, 2019 Government & Community Affairs, NAR Updates
After clearing hurdles in the House and the Senate this week, a federal spending bill goes to the White House for the President’s signature, funding part of the federal government through Fiscal Year 2020, and it includes many important pieces related to real estate that the National Association of REALTORS® worked hard to achieve.
“We knew it would be a big agreement and pushed hard for our issues to be included. The bill provides authority for the National Flood Insurance Program through Sept. 30, extends several tax provisions important to real estate markets, and reauthorizes the Terrorism Risk Insurance Program for seven years. Our members can plan better for 2020 now, and NAR has a solid footing going into next year as we prepare to fight for further reforms," said Shannon McGahn, NAR's chief lobbyist.
Specifically, the spending package contains three key NAR priorities, each representing wins for REALTORS® and the real estate industry
National Flood Insurance Program
A nine-month extension of the NFIP’s authority will ensure policies can be issued and renewed through September 30, 2019. NAR is urging Congress to use the additional time afforded by this extension to work toward consensus on the NFIP Reauthorization Act. REALTORS® have thrown their public support behind the bill, which includes significant reforms and a 5-year program reauthorization, stating that it strikes a delicate balance between NFIP sustainability and affordability.
More on NFIP
Terrorism Risk Insurance Program
The Terrorism Risk Insurance Program was reauthorized for seven years, representing a particular victory for NAR’s commercial members. Key aspects of the industry would be threatened in the program’s absence, as terrorism risk insurance is often required to secure necessary financing for commercial transactions. NAR had repeatedly called on Congress to reauthorize TRIP before its scheduled expiration in 2020.
More on TRIP
Included in the package are temporary extensions of three tax provisions directly impacting the real estate industry:
- The exclusion of forgiven mortgage debt from gross income, meaning that owners of primary residences who sold them short and had part of their mortgage debt written off will not have to pay tax on the amount forgiven;
- The deductibility of premiums for mortgage insurance; and
- The deduction of the cost of improvements to commercial buildings that make them energy efficient. These provisions had all expired at the end of 2017, but the bill extends them, retroactive to the beginning of 2018, and through the end of 2020.