$5,000 Tax Credit and 5% Rent Cap: Biden’s Plan to Tackle High Housing Costs

President Biden’s new plan aims to curb high housing costs by limiting rent increases for large landlords and introducing tax credits for homebuyers and sellers to make homeownership more affordable.

A New Effort to Tackle High Housing Costs and Encourage Development

President Biden has introduced a new plan to help with the high cost of housing in the United States. The plan wants to limit rent increases to 5% per year for big landlords who own 50 or more units. If these landlords raise rents more than that they could lose important tax breaks. This plan aims to protect over 20 million rental units and stop large property owners from making too much profit by raising rents too high.

Some industry groups are not happy with the plan saying it could stop people from investing in new rental properties. However, the Biden administration believes the plan will protect renters from unfair rent hikes while still encouraging the development of new housing. This is part of a bigger effort to deal with both the immediate problem of high rents and the long-term need for more housing, according to the report of Kiplinger.

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(photo: Cato Institute)

Tax Credits and Protections to Make Homeownership More Affordable

Biden’s plan also includes new tax breaks for homebuyers and protections for renters in larger buildings. One idea is a two-year tax credit of $5,000 for first-time homebuyers from the middle class. Another proposal is a one-year tax credit of up to $10,000 for families selling their starter homes to other buyers who will live there. As these ideas are discussed there will be more debate on the best ways to make housing more affordable for everyone.

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