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In This Issue
Mortgage Interest Deduction
MID: Witnesses Say No Cuts Now
National Flood Insurance Program
Congress Extends Flood Insurance until Nov. 18
Mortgage Interest Deduction
MID: Witnesses Say No Cuts Now
On October 6, 2011, the Senate Finance Committee held another in a series of hearings on tax reform, this time focusing on housing incentives. Five witnesses testified from a variety of perspectives, but they were unanimous on one point: Now is not the time to make any changes to the mortgage interest deduction (MID). Witnesses included representatives from the Pulte Corporation (housing construction), the National Association of Home Builders (NAHB), retired Senator John Breaux (D-LA) and two academic economists.
Senator Breaux advocated the approach that had been taken by the 2005 Bush Tax Reform Panel, recommending that the MID be gradually converted from a deduction to a 15% tax credit. Pulte and NAHB delivered the same message that NAR provided in a written statement: housing changes should be retained intact. Both economists believed that the MID should be reduced at some future time, but not presently. All five witnesses emphasized that the market is far too fragile and that any changes to housing incentives, especially MID, would cause greater instability and price declines.
Almost all of the discussion during the Q&A period was about MID. A few references were made to second homes, but the witnesses emphasized that changes to MID for second homes would have serious jobs and revenue impact on second homes communities. NAR and NAHB noted the importance of the $250,000/$500,000 exclusion in written comments, but no Senator made any inquiry related to it.
Linda Goold, 202-383-1083
Ken Wingert, 202-383-1196
National Flood Insurance Program
Congress Extends Flood Insurance until Nov. 18
On October 4, 2011, Congress extended National Flood Insurance Program (NFIP) authority as part of a broader stopgap government funding measure, the Continuing Appropriations Act (H.R. 2608). This latest extension will run through November 18, 2011. NAR is urging Congress to use the additional time to complete work on a 5-year NFIP reauthorization bill (H.R. 1309) to provide certainty and avoid further disruption to real estate markets.
Austin Perez, 202-383-1046
Daniel Blair, 202-383-1089
Russell Riggs, 202-383-1259