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FOR IMMEDIATE RELEASE
November 9, 2007
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Contact: Zach Goldberg
202-225-5801 (office) |
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HOLT-EMANUEL PROPERTY TAX RELIEF INITIATIVE
INCLUDED IN HOUSE ‘TEMPORARY TAX RELIEF ACT’
Provision Would Allow Millions of American Homeowners Who Do
Not Itemize on to Take Additional Standard Deduction
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(Washington, D.C.) – The U.S. House of Representatives on Friday considered the Temporary Tax Relief Act of 2007, legislation that includes an initiative championed by Reps. Rush Holt (NJ-12) and Rahm Emanuel (IL-5) to create a new property tax deduction for American homeowners who are suffering from high property tax bills. The Holt-Emanuel provision would allow homeowners who currently do not itemize on their Federal tax returns to take an additional standard deduction for the state and local property taxes that they pay. The Temporary Tax Relief Act creates an additional standard deduction of $300 for single filers and $700 for joint filers for state and local real property taxes paid or accrued. The provision is effective for 2008.
“Homeowners in New Jersey on average pay the highest property taxes in the country. This provision will provide some relief to homeowners who do not itemize and are unable to currently take a deduction on their taxes,” Holt said. “I’m pleased that our initiative is included in this Temporary Tax Relief bill, and I will continue to work to ensure that homeowners can benefit from this relief beyond next year.”
"Millions of homeowners are facing soaring property tax bills and declining home values. The tax code compounds this problem by excluding up to 30 million middle-class homeowners who don’t itemize on their tax returns from being able to deduct their property taxes. This legislation will end the property tax inequity and allow all homeowners to receive property tax relief,” Emanuel said.
In 2005, there were 72.3 million owner-occupied households in the United States, but only 40.5 million taxpayers claimed an itemized deduction for real estate property taxes. The more than 30 million homeowners who don’t currently benefit from property tax deductions include elderly homeowners who no longer itemize in order to receive a mortgage interest deduction, but are still subject to high property taxes.
The standard federal tax deduction is adjusted each year for inflation, but that adjustment does not take into account the rising property tax values and increases. Based on Census data, the total amount of state and local property taxes paid in the United States increased by 50 percent from 2000 to 2006. Over the same period of time, inflation increased by only 17 percent. Over that time, median household income actually dropped by 2 percent.
The House is expected to pass the “Universal Homeowner Tax Relief Act” on Friday. It would then need to pass in the U.S. Senate.
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