DAVOS, Switzerland — While financial institutions, including credit unions, gave most of their attention to President Donald Trump’s call during the World Economic Forum for a 10% cap on credit card APRs, he also floated a provocative idea that could upend long-standing U.S. housing tax rules when he suggested homeowners might one day be allowed to claim depreciation on their primary residences.
That is a benefit now largely limited to businesses and rental property owners.
Speaking at the event in Switzerland, Trump questioned why depreciation applies to corporate and investor-owned housing but not to owner-occupied homes.
“The crazy thing is a person can’t get depreciation on a house, but when a corporation buys it, they get depreciation,” Trump said. “OK, here’s something we’re gonna have to think about.”
No Details Offered
Trump did not outline how a homeowner depreciation deduction might work or how it would interact with existing tax provisions, including capital gains exclusions on primary residences and rules governing depreciation recapture when a property is sold at a profit.
Any change would likely need to coexist with the mortgage interest deduction and limits on property tax write-offs, which already play a central role in many homeowners’ tax planning strategies, analysts noted.
Could Reduce Cost of Homeownership
According to Mortgage Professional, if enacted, a recurring depreciation deduction for owner-occupied homes could reduce the after-tax cost of homeownership and shift buy-versus-rent calculations, particularly for higher-income borrowers who itemize deductions. It could also push more borrowers and advisers to focus on long-term basis tracking and capital gains outcomes rather than solely on interest rates and loan terms.
As the CU Daily reported here, Trump also signed a new executive order aimed at curbing the influence of large institutional investors in the U.S. housing market, a move the administration says will help make single-family homes more affordable and accessible for homebuyers.
