Stop Predatory Investing Act

The "Stop Predatory Investing Act" proposes amendments to the Internal Revenue Code of 1986, primarily targeting large-scale owners of single-family residential rental properties. Its central purpose is to deny certain tax deductions , specifically interest and depreciation, for entities deemed "disqualified single family property owners." This measure aims to disincentivize institutional investment in the single-family housing market. Under the bill, a taxpayer owning 50 or more single-family residential rental properties would be classified as a disqualified owner. Such owners would no longer be able to deduct interest paid or accrued on these properties, nor would they be able to claim depreciation deductions. Both disallowances include an exception: the deductions are permitted in the taxable year of sale, but only if the property is sold to an individual for use as their principal residence or to a qualified nonprofit organization . Qualified nonprofit organizations are broadly defined to include entities like community development corporations, land banks, and community land trusts, all focused on creating or preserving affordable housing. A single-family residential rental property is defined as one containing four or fewer dwelling units, with specific exclusions for certain affordable housing projects or newly constructed properties. The amendments would apply to indebtedness incurred and property placed in service in taxable years beginning after the bill's enactment.