Congress targets hedge funds' single-family home hoards with escalating tax
S. 788 — HOPE (Humans over Private Equity) for Homeownership Act · Filed by Jeff Merkley (D-OR) · 6 cosponsors · Introduced Feb 27, 2025 · Referred to committee
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What it does
This bill imposes excise taxes on hedge funds and similar investment entities that own single-family homes. It charges a 15% tax (minimum $10,000) when they buy a home, and an annual $5,000-per-unit tax on any homes they hold above a shrinking threshold—starting at 90% of their baseline holdings and declining to zero over 9 years, forcing divestment. It also strips mortgage interest and depreciation deductions from these entities while they owe the tax. The stated goal is to reduce institutional investor ownership of single-family homes and increase housing availability for individual buyers.
Why we flagged it
The bill's core mechanism is a targeted excise tax regime designed to discourage and force divestment of single-family homes by large investment entities. It is not a general tax reform or housing subsidy, but a sector-specific penalty structure paired with deduction disallowance.
What the text implies
- The 'disqualified sale' definition (section 5000F(d)(3)) prevents hedge funds from selling to other investors or multi-property owners, effectively forcing sales to owner-occupants or small landlords—a structural market intervention beyond the tax itself.
- Non-hedge-fund entities (REITs, partnerships, corporations) face a softer threshold: they can hold 50 units plus a declining percentage, while hedge funds get zero baseline—creating a two-tier system that may advantage certain institutional structures over others.
- Foreclosed properties acquired by hedge funds are explicitly included in the tax base, while foreclosed properties acquired by others are exempt—potentially reducing institutional participation in distressed-property markets and affecting price discovery in foreclosure auctions.
- The bill does not address whether the excise tax is deductible as a business expense, creating potential double-taxation risk and ambiguity in effective tax rates.
- Aggregation rules (section 5000G(e)) treat related entities as a single taxpayer, potentially allowing sophisticated restructuring to split holdings across unrelated entities and evade the threshold.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Ordinary citizens benefit from reduced institutional investor competition for single-family homes, potentially lowering purchase prices and increasing owner-occupancy rates. The tax targets large investment entities, not individual homeowners, and the forced divestment timeline creates a structural incentive to return homes to the market where individual buyers can compete.
Who stands to gain
- Individual homebuyers (reduced competition from institutional investors)
- Small landlords and owner-occupants (potential price relief and market access)
- U.S. Treasury (excise tax revenue)
Named in the bill
Hedge funds, Real Estate Investment Trusts (REITs), Partnerships and corporations managing pooled investor funds, Internal Revenue Service, Single-family residential property market
Where it stands
6 cosponsors: 4 Democrats, 2 Independents.
- Feb 27, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- Feb 27, 2025 — 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
1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $410,000 in lobbying spend. A filing names 166 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 0% of bills with at least one filing.
Jeff Merkley, the sponsor, reported $514,925 in PAC receipts in the 2026 cycle.
- American Federation of Teachers — $410,000 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.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (12,462 characters) on Jun 3, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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