Mortgage Tax Deductions At Risk

September 12, 2007

Congress is proposing to target homes that are larger than 3,000 square feet.  Their idea is to entice people to conserve energy.  Therefore, they are talking about eliminating the mortgage-interest tax deductions for houses larger than 3,000 square feet.  Rep. John Dingell, Chairman of the House Energy and Commerce Committee, has proposed and made this part of a bill that will introduce a "comprehensive climate change reform legislation.  It includes eliminating this deduction-limiting provision.

"Such a law is essential to reduce carbon emissions by 60 to 80 percent by the year 2050," he said. "In order to address the issue of climate change, we must address the issue of consumption. We do that by making consumption more expensive."   It is known that houses have been contributing to greenhouse gas emissions through heating, cooling, electrical usage and building materials.  But, many home builders are reporting that they have followed "green" procedures in recent years.  Then newer homes constructed within the past few years are the tightest and the most energy-efficient in history.

Lawrence Yun, who is a senior economist for the National Association of Realtors, remarked that eliminating the mortgage-interest tax deductions for all single-family homes that are larger than 3,000 square feet would result in a national median house price decline.  This decline would account for about 4 percent on all homes, not just large houses.  There are over 10 million single-family homes that are larger than 3,000 square feet of living area or more. These homes make up about 15 percent of the nation’s owner-occupied housing.

Posted in All Things San Diego, Lending, Local Business, Real Estate, Taxes, Things of Interest