NCPA - National Center for Policy Analysis

How Much Is That Home Ownership Tax Deduction Worth?

July 24, 2001

The figures for 2000 won't be known for some time, but homeowners deducted at least $164 billion in mortgage interest and property taxes from their federal income taxes in 1990, according to the Brookings Institution. However, most of the benefit went to homeowners in just a few metropolitan areas.

  • Hawaii residents realized tax benefits of $9,181 per owner-occupied housing unit -- the highest in the 50 states.
  • They were followed by residents of the District of Columbia, at $7,535 per unit.
  • Residents of other states in the top rankings included California at $7,198 per owner-occupied unit.
  • Other states in which residents realized nearly or more than $5,000 per year in tax deductions included Connecticut, New Jersey, New York, Massachusetts and Maryland.

California received more than one-quarter of the net benefits -- although it is home to only 10 percent of the nation's homeowners.

Three large metro areas -- New York-northern New Jersey, Los Angeles-Riverside-Orange County, and San Francisco-Oakland-San Jose -- received more than 75 percent of the total net tax benefit.

Source: Brookings Institution, "Coastal Clout," Washington Post, July 23, 2001.


Browse more articles on Tax and Spending Issues