The House Republican tax plan will not end deductions for state and local property taxes, Ways and Means Chairman Kevin Brady said in a statement this weekend.
“At the urging of lawmakers, we are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” the Texas Republican said.
Keeping the property tax deductions is a nod to Republicans from high-tax states like New York and New Jersey who have threatened to oppose the GOP tax bill if the plan would eliminate deductions for state and local taxes. It’s unclear how many of those members will be satisfied by the announcement as it appears the deduction for state and local income taxes will still be eliminated, under the GOP plan.
Under current law, anyone who itemizes on their federal tax return can deduct their property taxes in addition to either their state and local income taxes or sales taxes.
The House tax bill is set to be unveiled Wednesday.
A spokeswoman for Brady did not provide further details about a potential deal on the state and local tax, or SALT, deduction.
Brady also addressed certain industry groups that have pushed for certain housing-related provisions in the tax code overhaul. The National Association of Home Builders and others had pushed back on the GOP tax plan, saying the proposal to double the standard deduction would reduce the value of the mortgage interest deduction.
“The homebuilders have been great partners in developing a new home credit that helps more Americans with both their mortgage and property taxes, by expanding this tax relief to homeowners who don’t itemize,” he said. “I hope members of Congress will examine it closely to determine if they want it included before tax reform heads to the president’s desk.”
Bloomberg was first to report the property tax deal on Saturday.