Advisers eye potential depreciation write‑off for primary homes
President Donald Trump put a provocative housing tax idea back on the policy agenda, suggesting in Davos that US homeowners might one day claim depreciation on their primary residences – a benefit now largely reserved for businesses and landlords.
Under current IRS rules, depreciation allows rental and business property owners to deduct part of a building’s cost each year, based on its tax basis, recovery period and method, rather than simply writing off mortgage principal or furnishings as expenses. The regime generally excludes owner‑occupied homes, except for portions used for business.
“The crazy thing is a person can’t get depreciation on a house, but when a corporation buys it, they get depreciation,” Trump said in his address at the World Economic Forum in Davos, Switzerland. “Okay, here’s something we’re gonna have to think about.”
How a new break could reshape housing math
Trump offered no blueprint for how a homeowner deduction might work or how it might interact with long‑standing rules on basis, recovery periods and depreciation recapture when a property is sold at a gain.
Any eventual design would need to sit alongside the existing exclusion for capital gains on a primary residence and the mortgage interest and property tax deductions that already anchor many long‑term housing strategies.
If enacted, a recurring depreciation write‑off on a principal home could lower the after‑tax cost of ownership and alter buy‑versus‑rent analysis, especially for higher‑income borrowers who still itemize deductions. It could also push more planning conversations toward basis tracking and capital‑gains outcomes, rather than just rate and term.
Policy signals on affordability and investors
The remarks came as the administration moves more aggressively on housing affordability, including an executive order to curb Wall Street’s role in single‑family housing.
The order stated that large institutional investors should not buy single-family homes that could otherwise be purchased by families. A White House fact sheet said federal agencies would review major acquisitions by large landlords for anti‑competitive practices.
In late 2025, Trump already pledged on social media to “ban the purchase of single-family homes by what he called ‘large institutional investors,’” framing the move as an early step on affordability.
The Davos trial balloon does not yet change how loans are structured or advised. But it underscores that tax treatment of housing – from investor restrictions to possible new deductions – has re‑emerged as a live policy lever, one that could materially reshape credit demand, product design and long‑term wealth planning.
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