President Donald Trump has proposed the possibility of allowing everyday homeowners to benefit from property depreciation, a tax break that has traditionally been available only to real estate investors. This idea comes amid a series of initiatives aimed at addressing housing affordability as the 2026 midterm elections approach.
During a recent speech at the World Economic Forum in Davos, Trump highlighted a perceived inconsistency in the tax code: while corporations can claim depreciation on properties, individual homeowners currently cannot. He indicated that this is an issue worth consideration and reflects a broader aim to alleviate financial burdens for American families.
Home depreciation, often referred to as a “phantom tax,” involves the deduction for the wear and tear on a property calculated over 27.5 years. If implemented for primary residences, homeowners could see a significant reduction in tax liabilities, potentially increasing their tax refunds or providing additional deductions for real estate investors who also own their homes.
The potential benefits of personal home depreciation raise several questions about how it would be structured. For instance, it remains unclear whether the deductions would adhere to the same guidelines as those for investment properties and what income thresholds might apply.
In addition, Trump’s housing initiatives include discussions on capital gains exclusions for single-family homes and other measures aimed at enhancing cash flow for Americans. However, the practical implications of these proposals and their long-term effectiveness in addressing affordability in housing remain to be seen.
Why this story matters: The proposal could significantly impact homeowners’ financial situations.
Key takeaway: Trump’s suggestion to allow homeowners to claim property depreciation could reduce their tax burdens.
Opposing viewpoint: Critics may argue that these changes could disproportionately benefit wealthier homeowners or complicate existing tax regulations.
