The House is set to take up a tax bill on Tuesday that would give states the power to impose property taxes on the homes of their residents, potentially costing as much as $1.3 trillion over the next decade.
The bill, called the Fair Property Tax Reform Act, would apply to nearly every property in the country.
The measure has garnered bipartisan support and is expected to pass the Senate.
While it’s not the first time Congress has considered a tax on homes, the bill would be the first to apply to a significant portion of homes, experts said.
The Fair Property and Tax Reform bill would tax all new and existing structures in the United States, including multifamily and single-family homes.
Critics have said the legislation would be a tax hike for middle-class families, while proponents have argued that it would be good for the economy and create jobs.
The Fair Property tax reform act, known as the Fair Housing Act, has been a keystone of Republican efforts to cut taxes and cut government spending.
It was signed into law by former President George W. Bush in 2007 and is currently in force in the 28 states and the District of Columbia that have passed legislation.
Under the Fair Tax Reform act, tax revenue would be limited to the fair market value of each new and used home, including taxes, maintenance, and repairs.
Under the Fair Home Owners Tax Relief Act, tax relief would be extended to the cost of new homes, including repairs and taxes, and to the estimated cost of a new home if it is built on land that has been deeded to the federal government.
States could also use the bill to impose an income tax on the home’s value.
This would not apply to newly built or existing homes.
Critics of the bill have argued it would encourage owners to buy more expensive homes instead of keeping their existing ones.
They have also argued it could hurt businesses, especially the construction industry, which depends heavily on home sales.
House Minority Leader Nancy Pelosi (D-Calif.) has said the bill is necessary to help homeowners and businesses recover from the housing crisis.
“House Republicans want to give states more power to tax their residents,” Pelosi said last week.
“That’s wrong, and it’s unfair.”
The House is expected in mid-April to vote on the Fair Income Tax Act, which is expected also to pass in the Senate, and the Fair Mortgage and Housing Act.
Democrats have proposed legislation to tax interest on home loans, while Republicans have proposed tax breaks for homeowners, which would likely pass.
House Minority Whip Steny Hoyer (D, Md.) has expressed concern that the bill could help wealthy people and businesses, and called it a tax giveaway for the wealthy.
“It would be in the interest of a wealthy minority to try to pass this tax giveaway legislation in the middle of the night, with little notice, just to help the rich,” Hoyer said.