The American Homeowners Grassroots Alliance supports the tax deductibility of mortgage interest and private mortgage insurance. AHGA also supports the exemption of capitol gains or other taxation on the sale of the home. For most homeowners home equity represents a substantial portion of their net worth. For most homeowners the largest portion of that home equity is due to appreciation.
It is in the national interest to encourage home ownership for several reasons. It contributes substantially to the economic health of the American middle class. Accumulation of substantial net worth through a lifetime of home ownership means retirees are less dependent on both social security and retirement programs as a source of income in their retirement years. The stimulation of home ownership through the mortgage interest deduction and capital gains exemption is therefore sound economic policy. The economic stimulus of tax benefits is multiplied by the equity growth is created through home appreciation.
In addition home ownership creates substantial social benefits. Home ownership contributes to a sense of community and social stability, and is a substantial contributor to the growth and stability of the middle class. Homeowners are more likely to feel a vested interest in their communities, and support efforts to make the communities better places to live for all residents. For these reasons the tax incentives accorded home ownership should be protected and preserved.
The cap on the current $250,000/single, $500,000 married capitol gains exemption should be lifted. As an interim step it should be indexed for inflation.
We should avoid the creation of tax barriers to home ownership, especially those barriers that make it more difficult for those of low and moderate income to attain home ownership. For this reason AHGA urges the repeal of the tax on American Homeowners. AHGA testimony in opposition to the tax on American Homeowners.
A variety of additional tax incentives are also important to home owners and should be enacted or retained:
Tax credits should be offered to homeowners and builders to
encourage higher standards of energy efficiency in new home
construction and remodeling
First time home buyers should allowed a tax credit of 10% of the
purchase price of new home, capped at a maximum of $6,500
The Employee Retirement Income Security Act or 1974 (ERISA)
should be amended to permit investments by retirement plans in
principal residences of children and grandchildren who are buying
their first home.
The existing “tax on talking”, originally enacted to fund the
Spanish American War, should be repealed