Thousands of middle-class homeowners get relief
In a joint effort by Republican Representative Vern Buchanan and several other lawmakers to reinstate and extend a federal tax deduction that lapsed on mortgage insurance premiums, this could be a game-changing move to make owning a house easier, given the very high prices of houses.
“You see, with housing prices skyrocketing in Florida and throughout the United States, I think it is our responsibility to provide tax relief to middle-class families,” Buchanan said. The proclamation-Middle Class Mortgage Insurance Premium Act-intends for a permanent reinstatement of that deduction and expanded eligibility for more households.
Why it matters: The tax deduction
Mortgage insurance serves the majority of homebuyers whose 20% down payment is not enough to qualify for a mortgage. Most importantly, it saves middle-income families from losing out on many savings. In 2020, according to IRS data, over 361,000 buyers in Florida paid for mortgage insurance, and the average deduction amounted to around $2,100 for each household.
The deduction has been in force since 2007, 2021, and just recently expired. During its 14 years in operation, it had scars of over 44 million claims across the country and an estimated $64.7 billion savings for Americans.
Increased eligibility proposed
Buchanan’s bill-HR 2760- not only aims to restore the deduction but also seeks to open eligibility further by raising the $100,000 limit on annual income to $200,000. This would allow more mid-income families to meet the threshold for savings.
This bipartisan bill has so far ten cosponsors: 3 republicans, 7 democrats. The cosponsors include Rep. Jimmy Panetta (D-CA), Rep. Susan DelBene (D-WA), and Rep. Bryan Steil (R-WI).
Support within the industry and among lawmakers
Most housing advocates and lawmakers endorse the legislation, terming it a sensible answer for an increasingly rising affordability crisis. “Our bill would make the mortgage insurance premium tax deduction permanent and update the income threshold so more middle-class homeowners can benefit,” said Representative Panetta.
Representative Scott Fitzgerald (R-WI) said this about it: “Middle-class families shouldn’t be penalized for pursuing homeownership. This bill is a smart, targeted way to support hardworking families.”
Seth Appleton, president of U.S. Mortgage Insurers, added that the legislation would “restore, make permanent, and expand eligibility for the tax deduction” impacting potentially millions of future and current homeowners.
Step for housing stability in florida
Housing affordability remains a major concern for people living in Florida. Steep property insurance costs, increased homeowner association (HOA) dues, and high mortgage rates have kept so many would-be buyers at bay. Meanwhile, home shopping further out of state falls-and that’s even without discussing comparatively high prices for housing.
Reinstating the mortgage insurance tax deduction would alleviate that burden for many Floridians. While Congress continues to wrestle with the measure, its bipartisan support bodes well for passing it and, in the end, providing meaningful relief for families trying to get a house in this tight market.
