H.R. 7138: Stop Wall Street Landlords Act of 2026

This bill, known as the Stop Wall Street Landlords Act of 2026, proposes several changes aimed at large investors owning single-family homes. The main elements of the bill can be summarized as follows:

1. Changes to Tax Deductions

The bill would disallow certain tax deductions for large investors who own single-family homes. Specifically, the following expenses would not be deductible:

• Mortgage interest payments for single-family homes owned by large investors.
• Depreciation on the value of these homes.

A "specified large investor" is defined as any individual or entity with an asset value exceeding $100 million, not including their debts. This includes controlled groups of companies, but government entities and some tax-exempt organizations are excluded.

2. Excise Tax on Home Sales

The bill imposes a new excise tax on the sale or transfer of single-family homes by specified large investors. The tax would be equal to the sale price of the home, essentially taxing the entire value of the sale. The same definitions for "specified large investor" and "single-family home" apply here as in the case of tax deductions.

3. Funds Collection and Housing Assistance

Any money collected from this excise tax would be deposited into the Housing Trust Fund. The funds would be utilized to enhance the supply of rental housing that is affordable to families with extremely low and very low incomes, including those who are homeless.

4. Prohibition on Federal Mortgage Assistance

The bill prohibits federal mortgage entities, such as Fannie Mae, Freddie Mac, and Ginnie Mae, from providing new mortgages or mortgage guarantees for homes owned by specified large investors. These entities would not be allowed to purchase these mortgages or lend against homes owned by large investors.

5. Effective Date

The provisions of the bill would take effect 18 months after the date of enactment, meaning any disallowed deductions or taxes imposed would apply to transactions taking place after this period.

Relevant Companies

• AMH (American Homes 4 Rent) - As a large investor in single-family rental homes, the changes could significantly impact their tax liabilities and capital structure.
• Zillow (Zillow Group, Inc.) - Zillow's operations may be affected if they are involved in the ownership of single-family homes, especially regarding mortgage assistance and taxes on home transfers.
• INVH (Invitation Homes) - This company focuses on owning and renting out single-family homes, and the proposed excise tax and disallowed deductions could impact their profitability.