This isn’t the first time we’ve heard this report but maybe, just maybe the bill will pass this time. Representative Keith Ellison of Minnesota has proposed a bill that would provide homeowners with mortgages up to $500,000 with a higher tax credit. The new bill would replace the current mortgage interest deduction with a 15% flat tax credit. This would put more money in the pockets of homeowners by reducing their tax liability.
According to Congressman Ellison, the passing of the bill would provide more opportunities for middle income Americans to stop renting and finally buy a home of their own. He also stated that the revenue generated from the new flat tax could be used to address the affordable rental housing shortage. As you may already know, big increases in the cost of rentals across the nation have become a problem for many that cannot afford to buy their own home. If passed approximately 16 million homeowners would receive higher tax breaks.
Representative Ellison has proposed similar legislation in the past but it was rejected by the House Committees on Ways and Means and on Financial Services. I hope that the new bill does pass this time around. Not only will current mortgage holders pay less in taxes but many persons with lower incomes may be able to finally afford a home of their own. You can read more about the new bill at HR 1662, the Common Sense Housing Investment Act.