SHARE Act

Plain-English Summary

This bill would change federal tax law to allow certain homeowners to exclude specific income from their taxes when they use a financial arrangement called a "shared appreciation mortgage." In a shared appreciation mortgage, a lender — often an investor or financial company — helps a homeowner by providing money (such as help with a down payment or reducing monthly payments) in exchange for a share of the home's future increase in value. When the homeowner eventually sells the home or pays off the arrangement, they pay the lender their agreed-upon portion of the profit.

Under current tax law, the money a homeowner receives through one of these arrangements might be considered taxable income. This bill would change that by saying that certain proceeds from shared appreciation mortgage contracts do not have to be counted as income for federal tax purposes. In other words, homeowners who use this type of financing tool would not owe federal income tax on the funds they receive through the arrangement.

This bill would primarily affect homeowners — particularly those who use shared appreciation mortgages as an alternative way to finance buying or owning a home. These arrangements are sometimes used by people who may not qualify for traditional mortgages or who need help affording homeownership. Lenders and investors who offer these products could also be affected. The bill has been introduced in the House of Representatives and referred to the House Committee on Ways and Means, which handles tax-related legislation, but it has not yet been voted on.