Remodelers are seeing de facto regulatory relief and could see interest on loans for major repair work continue to qualify for tax deductions, NAHB officials are telling remodelers this week.

The updates came at various NAHB Remodelers meetings just prior to the start of the International Builders’ Show, which officially begins in Orlando, Fla., on Jan. 9.

The tax reform legislation passed just before Christmas and enacted Jan. 1 ostensibly bars the deductibility of interest paid to home equity lines of credit (HELOCs), J.P. Delmore, an NAHB government affairs officer specializing in tax issues, told the full NAHB Remodelers council. However, Internal Revenue Service (IRS) codes continue to permit the deductibility of mortgage interest for “substantial improvement” to a home, he noted.

“Since the tax law passed, we’ve been studying the rules in place and have identified what we believe is a viable interpretation of the IRS regulations as they relate to the mortgage interest deduction,” Delmore said. “We are going to seek additional guidance and clarity on [what constitutes] ‘substantial improvement.’”

Delmore emphasized that whatever interest is occurred for making substantial improvements is still subject to the $750,000 overall cap on mortgage interest.

“We’re looking for a solution for you guys,” Delmore said. “We think we have one in front of us.” Because the IRS hasn’t replied to NAHB’s request, you can’t bank on the association’s interpretation, he said, but it may be worthwhile to speak with a tax advisor.

On Jan. 7, at a Remodelers subcommittee meeting, NAHB Chairman Granger MacDonald and Rob Matuga, NAHB’s expert on OSHA, both noted the dramatic change at regulatory agencies since Donald Trump took office 12 months ago. OSHA rules, inspections, and fines traditionally have been one of the greatest sources of complaints that remodelers cite when they talk about the federal government. After Trump arrived, several Obama-era rules have been rescinded or left in limbo.

“Whether you like Trump or not, what he’s done for us regulatorily (sic) is like a dream come true,” MacDonald said.

“My sense is that new rules and regulations in the administration are going to be few and far between, especially from OSHA,” Matuga said.