Congress targets hedge funds buying up single-family homes with 15% tax

What it does

This bill imposes a 15% excise tax on hedge funds and large private equity firms (with $50M+ in assets) when they buy single-family homes, and denies them tax deductions for mortgage interest, depreciation, and business income on rental properties. The goal is to discourage institutional investors from buying up residential housing stock that ordinary families might otherwise purchase.

Why we flagged it

The bill uses tax policy to discourage large investment firms from acquiring single-family residences for rental or speculation, treating housing as a public-interest asset rather than a pure investment commodity. It is fundamentally a market-structure intervention, not a revenue measure.

What the text implies

• The 15% excise tax applies only at acquisition; existing hedge fund portfolios of single-family homes are grandfathered, meaning the policy does not unwind current institutional ownership but only slows future accumulation.
• The mortgage-interest and depreciation deductions are disallowed only for hedge funds actively in the rental business (post-2030), creating a potential loophole for funds that hold properties for appreciation without active rental operations.
• The $50M asset-under-management threshold may capture some smaller regional investment firms and family offices alongside major hedge funds, potentially affecting a broader set of entities than the bill's title suggests.
• Effective dates are staggered (2030–2035 for deduction disallowance), delaying the full impact and allowing affected firms time to restructure holdings or exit the market before penalties apply.

Who it affects

Ordinary homebuyers and renters benefit from reduced institutional competition for single-family housing, potentially lowering prices and preserving homeownership opportunities. The tax burden falls on large investment firms, not consumers, and the policy directly addresses a documented market dynamic where institutional capital has crowded out individual buyers.

Who stands to gain

• individual homebuyers and owner-occupants
• small residential builders and developers
• local real estate markets with reduced institutional competition

Named in the bill

hedge funds, private equity firms, real estate investment trusts (REITs), Internal Revenue Code Section 5000E, Section 163 (mortgage interest deduction), Section 167 (depreciation deduction), Section 199A (qualified business income)

Where it stands

1 cosponsor: 1 Republicans.

• Feb 26, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Feb 26, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $125,000 in lobbying spend. A filing names 16 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Jeff Merkley, the sponsor, reported $514,925 in PAC receipts in the 2026 cycle.

• Cerberus Capital Management, L.p. — $75,000 on 1 filing
• Firstkey Homes, LLC — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.