On December 4, 2012, the ASHI Board authorized Jeff Arnold to notify the federal government that the Society objected to eliminating the home mortgage loan interest tax deduction. Also, the Board asked members to take part in a grass-roots campaign in support of its position.
ASHI LEGISLATIVE ALERT: Immediate Action Required
Wednesday, December 5, 2012
Action Item: Please contact your U.S. Senators and Representatives to support retention of the Home Mortgage Interest Deduction
Background: As you have heard in news reports, the President and Congress are engaged in intense discussions to avert what is referred to as "the fiscal cliff."
These discussions include talks of increased tax revenues, possibly by reducing the value of the Home Mortgage Interest Deduction (henceforth HMID). There are rumors of both direct and indirect tax mechanisms to reach this result. It is possible that such restrictions might be limited to high-income taxpayers. But, regardless of the specific mechanism, ASHI is concerned that limitations on HMID would have a negative impact on ASHI members.
The realty and mortgage banking industries, among others, are strongly opposed to any reduction in the value of HMID as an incentive to promote home sales and home ownership.
ASHI concurs with this view, as demonstrated in a policy statement approved by the ASHI Board and which is being sent to the White House and Capitol Hill. We urge you to contact your U.S. Senators and Representatives by telephone as soon as possible to state your views regarding HMID. Please see the text of the ASHI policy statement at the end of this Alert, which will assist you in making your call.
How to find contact information for your U.S. Senators and Representative: Go to www.contactingthecongress.org. Type your address where prompted, click "Submit it". You will see a display of your officials, including Senators and Representative. To call your Senators and Representatives, dial the Senate switchboard at 202-224-3121 or the House switchboard at 202-225-3121. Ask to be connected to the member you would like to reach. Once connected to the office in question, tell the receptionist that you are a constituent and you would like to give your opinion on retaining the Home Mortgage Interest Deduction.
Thank you for your grass-roots assistance regarding the Home Mortgage Interest Deduction.
Statement of The American Society of Home Inspectors Regarding Fiscal Cliff Negotiations Affecting the Home Mortgage Interest Deduction
Tuesday, December 4, 2012
To: The Honorable President Barack Obama
The Honorable John Boehner
The Honorable Nancy Pelosi
The Honorable Harry Reid
The Honorable Mitch McConnell
I am writing on behalf of the American Society of Home Inspectors (ASHI), representing nearly 6,000 home inspection professionals across the United States and North America.
ASHI strongly supports the retention of the home mortgage interest rate deduction (HMID) currently allowed under the U.S. tax code.
Further, ASHI opposes strategies that would diminish the value of the homeownership incentives offered by the HMID, particularly strategies that would limit total itemized deductions for mortgage interest on first and second homes, currently allowed under the U.S. tax code.
ASHI's views are predicated on 1) the impact, relevance and utility of the HMID in incentivizing home ownership in the United States, and 2) the economic/jobs impact on the professions and industries that are supported by the home sales economy.
The number of U.S. taxpayers whose abilities to establish and maintain home ownership, in part due to the HMID, is staggering.
A recent evaluation prepared by the congressional Joint Committee on Taxation (JCT) for consideration by the U.S. Senate Committee on Finance determined that, based on 2009 tax returns actually filed by U.S. taxpayers, approximately 36.5 million tax returns took advantage of the itemized deduction for home mortgage interest, claiming deductions for $420.8 billion of home mortgage interest.
In fact, JCT found that total claims were even higher when considering related deductions such as for deductible mortgage points and qualified mortgage premiums.
Clearly, the homebuying public constituency making use of the HMID represents a huge portion of the total consumer marketplace in America. The HMID has become an institutionalized factor in the home realty sales market whose disappearance or diminishment would have widespread negative economic impacts.
The United States is hardly alone in recognizing the broad economic benefits of home ownership and stimulating home ownership via tax incentives. Among the 33 countries that are members of the Organization for Economic Cooperation and Development (OECD), 18 provide a deduction for mortgage interest.
Further, the U.S. is not extreme in its tax policy supporting home ownership, ranking roughly in the middle of OECD countries.
The HMID deduction may lower the cost of capital required to purchase a home and service the debt by as much as seven percent by one estimate, allowing U.S. homebuyers to buy somewhat larger homes for their family enjoyment, or to use the savings for other purposes that benefit their interests or grow the economy.
Of course, a large portion of the realty-related economy depends on the stimulating effects of the HMID, including Realtors®, mortgage lenders, construction, renovation and repair contractors, appraisers and, of course, home inspectors.
The United States continues to suffer a persistent slump in home sales and home ownership that exerts a depressive effect on the overall realty-related economy. A diminishment of the HMID would only serve to continue, and perhaps exacerbate this pervasive problem, with the appurtenant negative impacts on the professions such as home inspection.
In sum, ASHI suggests any reduction in the effective value of the HMID to U.S. taxpayers would be the wrong move at the wrong time, with multiple negative impacts across the American economy.
We urge the U.S. House, Senate and the Obama administration to fully support the current tax treatment of the HMID, and to table any suggestions to the contrary.
The American Society of Home Inspectors