By Chris Polychron, First Vice President-Nominee, National Association of REALTORS®
As one educator said, “America is a land of taxation that was founded to avoid taxation.” So I think Tax Day is a good opportunity to talk about the tax benefits that go along with home ownership.
Since 1913, when the federal income tax became permanent, the tax code has offered a break for mortgage interest. This incentive to homeowners has reflected the high value that our nation places on homeownership due to the many financial and social benefits owning a home provides.
Additional tax incentives that encourage home ownership include deductions for property taxes and tax credits for energy-efficient remodeling projects and heating and cooling systems.
We believe these incentives should be protected because of the numerous financial and social benefits to the nation that are provided by homeownership. Even with these benefits, home owners currently pay 80 to 90 percent of the federal individual income taxes.
Let me mention a few of the financial benefits:
- Every home purchased pumps more than $60,000 into the economy for things like furniture and home improvements.
- Historically, a home owner’s net worth is 31 to 46 times that of a renter.
- For every two homes sold, one job is created.
- Housing is a key driver of our economy, accounting for more than 15 percent of the national Gross Domestic Product.
These benefits show the importance of housing as an engine of our economy.
On top of financial benefits, there are many social benefits:
- Home owners are happier and healthier.
- They participate more in their communities, including voting, volunteering and donating to charities.
- Their children stay in school longer and have higher test scores.
- Homeowners are less likely to be victims of crimes.
- They have a greater attachment to their neighbors and their neighborhoods, which fosters a greater sense of community.
This is just a partial accounting of the many social benefits that make our communities a better place to live and work.
While we don’t have to throw the tea in the harbor—yet—we can let our government representatives know strongly that we believe in the tax benefits provided to homeowners, particularly the mortgage interest deduction. As one former Secretary of the Treasury put it, “The nation should have a tax system that looks like someone designed it on purpose.”
So on this Tax Day, tell our leaders that we want to see the tax code continue to reflect the values of ordinary Americans, most of whom still consider home ownership to be a key part of the American Dream.
Death and taxes are certainties. Meanwhile, if you’re a homeowner, Tax Day doesn’t look so bad after all. And if you’re expecting a refund because of the MID—it can even become a day to look forward to.