Every day, the National Association of REALTORS® (NAR) fights for policy initiatives on behalf of the nation’s 1.4 million REALTORS® and 75 million property owners. In December, these efforts paid off when key provisions impacting the real estate industry were included in the latest federal spending bill.
REALTORS® have much to celebrate in the funding package for fiscal year 2020. The bill reauthorizes the Terrorism Risk Insurance Program for seven years, provides authority for the National Flood Insurance Program through Sept. 30 and extends several tax provisions important to real estate markets.
“Confidence and stability are two of the most critical factors impacting America’s housing market and economy,” says NAR President Vince Malta. “Fortunately, this funding agreement delivers that certainty to our members and the clients they work so hard to serve. NAR fought to eliminate short-term questions surrounding the status of the National Flood Insurance Program, federal terrorism insurance and these tax provisions, all of which will allow our members to plan better, minimize stress for prospective homebuyers and sellers, and keep our nation’s economy moving forward.”
Here is an update on the status of NAR’s advocacy efforts related to these programs:
Terrorism Risk Insurance Program (TRIP)
NAR scored a major victory with the seven-year reauthorization of TRIP, reassuring REALTORS® that the program will be in place until Dec. 31, 2027. Primarily benefitting commercial members, terrorism risk insurance is often required to secure financing for properties nationwide.
TRIP has its origins in the 9/11 attacks, after which many insurers raised terrorism risk insurance to unsustainable prices or stopped offering coverage entirely. The initial Terrorism Risk Insurance Act, providing a system of shared public and private compensation for insured losses from acts of terrorism, became law in 2002. Before its scheduled expiration in 2020, NAR repeatedly called on Congress to reauthorize TRIP, publicly supporting Chairwoman Maxine Waters’ Terrorism Risk Insurance Program Reauthorization Act of 2019.
National Flood Insurance Program (NFIP)
A nine-month extension of the NFIP’s authority will ensure policies can be issued and renewed through September. Since the Biggert-Waters Flood Insurance Reform Act expired in 2017, the program has operated on a string of short-term extensions with multiple lapses during that time. That unpredictability has put home sales in jeopardy and left insurance policies in limbo, with NAR research showing that NFIP lapses threaten 1,300 transactions daily.
NAR’s goal is to work toward a long-term solution that will ensure the program is solvent and sustainable moving forward. That’s why the association spent the year supporting the NFIP Reauthorization Act, which includes significant reforms and a five-year reauthorization, striking a delicate balance between sustainability and affordability.
Included in the spending package are temporary extensions of three tax provisions that expired at the end of 2017. The bill extends these provisions retroactively and through 2020:
- 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
- Deductibility of premiums for mortgage insurance
- Deduction of the cost of energy efficiency improvements to commercial buildings
NAR also advocated strongly for H.R. 5377, which passed the House in December. “The Restoring Tax Fairness for States and Localities Act” provides a temporary two-year repeal of the $10,000 cap imposed on state and local tax deductions (SALT).
Looking to the Future
Though NAR is thrilled with these important legislative victories, the association will continue to work vigilantly to advocate for bipartisan congressional support for public policy initiatives that protect property owners, promote the interests of REALTORS® and advance the real estate industry.
For more information, please visit www.nar.realtor.