Tax deferral for condo builders quietly expands beyond single-family homes
S. 1687 — Fair Accounting for Condominium Construction Act · Filed by Todd Young (R-IN) · Introduced May 8, 2025 · Referred to committee
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What it does
This bill amends the tax code to allow condominium and other residential construction projects (beyond single-family homes) to use a different accounting method for tax purposes. Instead of the 'percentage of completion' method, these projects can spread their income and deductions over a longer period (3 years instead of 2), deferring tax liability. The change applies only to contracts signed after the bill's enactment.
Why we flagged it
The bill's operative mechanism is a tax-accounting change that extends the deferral period for residential construction contracts beyond single-family homes. This is a targeted tax benefit for the construction and real estate development sector, not a broad tax reform or public-interest measure.
What the text implies
- The 3-year deferral window may incentivize slower project completion timelines, as builders can defer tax recognition by extending construction schedules within the allowable period.
- Expansion from 'home construction' to 'residential construction' captures condominium, apartment, and mixed-use residential projects—a significantly broader beneficiary class than the title suggests.
The full analysis lists 3 implications of this text.
Who stands to gain
residential construction companies; real estate developers; condominium builders