PROPOSED U.S. LAW TARGETS MORTGAGE TAX BREAK
August 28, 2007
Rep. John Dingell (D-Mich.), is stirring up a hornet's nest over his plan to introduce a new law that would deny Americans with homes larger than 3,000 square feet a cherished mortgage income tax deduction in an effort to discourage energy use, says the Financial Post.
Dingell's timing could not be worse, says the Post:
- The latest data from the troubled U.S. housing sector shows that existing home sales slumped 0.2 percent in July, the lowest in five years.
- Home prices also dropped for the 12th consecutive month; new and existing home sales are already down 10 percent from last year's level through July and foreclosures and defaults have soared.
- There are at least 10.4 million homes in America that measure more than 3,000 square feet, representing about 15 percent of the total U.S. housing stock.
Reaction to Dingell's bill was immediate and vocal. According to the Washington-based National Association of Realtors:
- Preliminary calculations showed that removing the tax write-off on mortgages on large homes would cut median prices on all housing by 4 percent.
- It would also lead to another 70,000 foreclosures to the 280,000 homes that already expected to be taken over by banks in coming months because of the subprime crisis.
Source: Peter Morton, "Proposed U.S. law targets mortgage tax break," Financial Post, August 27, 2007.
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