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The new research study by the National Association of Home Builders used the latest available IRS tax data -- tax year 2003 -- and broke deductions down by the state and congressional districts of the taxpayers. The report was prepared in part to demonstrate the size and economic importance of the mortgage interest and real property tax write offs to individual congressional representatives.
In tax year 2006, according to estimates by Congress's joint committee on taxation, homeowners will claim a total of $81 billion in mortgage interest deductions. As a practical matter, homeowners can write off interest annually on home mortgage debt totaling $1.1 million. The highest property tax deductions, not surprisingly, go to homeowners in high tax areas, especially in the northeastern states. The NAHB research found that the highest states for property tax write offs were New Jersey (an average $6,005 per homeowner), New York ($5,187), New Hampshire ($4,830), Illinois ($4,129) and Vermont ($3,845). The highest states for mortgage interest write offs on average were California (($14,217), Hawaii ($12,766), the District of Columbia ($11,759), Nevada ($11,522) and Washington ($11,223). The lowest states for mortgage interest deductions were Oklahoma ($5,710), Iowa ($6,754), North Carolina ($6,808) and Maine ($6,888). Because the mortgage interest and real estate deductions significantly reduce federal tax liabilities for homeowners, they are important tools for promoting homeownership. By M. Sese
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