Income Taxes

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As a result of the Merger described in Footnote 21, and effective April 20, 2024, the Company is included in the Sekisui House US Holdings (parent of SH Residential Holdings, LLC) consolidated tax group for U.S. federal income tax purposes. Although the Company’s post-merger results are included in the Sekisui House consolidated return, our income tax provision is calculated primarily as though we were a separate taxpayer for the full year. However, under certain circumstances, transactions between the Company and Sekisui House are assessed using consolidated tax return rules and any difference in liability between the separate company method is planned to be addressed in a future tax sharing arrangement.

Our overall effective income tax rates were 22.4% and 20.2% for the three and six months ended June 30, 2025 and 42.1% and 28.7% for the three and six months ended June 30, 2024, respectively. The rates for the three and six months ended June 30, 2025 resulted in an income tax expense of $7.4 million and $16.6 million, respectively, compared to $18.3 million and $48.7 million for the three and six months ended June 30, 2024, respectively. The year-over-year decrease in the effective tax rates for the three and six months ended June 30, 2025 is primarily due to the decrease in non-deductible executive compensation as the Company is no longer subject to the executive compensation non-deductibility rules of Internal Revenue Code Section 162(m), and prior year one time non-deductible transaction costs related to the Merger.