New Federal Tax Targets Landlords with Over 75 Homes, Funds Down Payment Assistance Starting 2026

The “American Neighborhoods Protection Act of 2025” is a direct shot across the bow of large-scale corporate landlords. Starting in 2026, it introduces a hefty new federal excise tax aimed squarely at entities that own too many single-family homes—and then uses that tax money to help regular folks buy houses. Specifically, if you’re a “covered taxpayer” and you own more than 75 single-family residences (defined as properties with four or fewer units), you’ll face a penalty of $10,000 per home over that 75-unit threshold, every single year. For instance, an entity holding 100 homes would owe $250,000 annually just for holding onto those 25 "excess" homes.

The Corporate Landlord Tax: What It Means for Inventory

This new tax is designed to be a massive financial disincentive, pushing large institutional investors to sell off their portfolios. Think of it as a forced inventory dump. The bill includes aggregation rules, meaning related companies are counted as one entity, preventing sophisticated investors from simply splitting their holdings across multiple shell companies to stay under the 75-home limit. There are exceptions: builders primarily focused on construction, mortgage holders who acquired property through foreclosure, and tax-exempt charities are spared. The definition of a single-family residence is also broader than you might think, covering small multi-family buildings up to four units, meaning some smaller landlords who own a few duplexes and triplexes might accidentally get swept into the count if they are part of a larger entity.

The Catch: Selling to the Right Buyer

To keep the tax from being easily dodged, there’s a special rule about sales. If a covered taxpayer sells a home during the year, that home still counts toward their total count on the last day of the year unless the sale was to an individual or a small group of individuals. If they sell it to a corporation, a business entity, or a group of more than two individuals, it still counts as if they owned it at year-end. This provision is clearly meant to prevent institutional owners from selling properties to other institutional owners right before the deadline. To enforce this, the bill requires the buyer of any property to certify their identity and status, and failing to report this information correctly carries a massive $50,000 penalty, even if the error wasn't intentional—a huge risk for administrative mistakes.

Earmarked Funds for Down Payment Relief

The most interesting part for everyday families is where the tax money goes. All revenue generated from this new excise tax is immediately funneled into a brand new Housing Trust Fund. This fund is strictly earmarked for one purpose: providing down payment assistance grants. The Secretary of Housing and Urban Development (HUD) will use this money to give grants to state housing finance agencies, which will then run local programs to help families with down payments. Crucially, these state agencies must prioritize families who are buying a single-family home that is being sold off by one of those taxed “covered taxpayers.” In short, the bill creates a direct cycle: large investors are taxed out of the market, and the money they pay is used to help individual families buy the very homes those investors are being forced to sell. It’s a direct subsidy designed to shift housing stock from Wall Street back to Main Street.