House Committee’s Tax Legislation Includes Holt’s Property Tax Relief Provision
Provision Would Benefit Property Owners in New Jersey Who Do Not Itemize on Federal Returns
Washington, D.C., November 1, 2007 – Today, Rep. Rush Holt (NJ-12) announced that the “Temporary Tax Relief Act of 2007”, a tax relief bill passed in the House Committee on Ways and Means this morning, includes a provision based on his legislation to allow homeowners who currently do not itemize on their Federal tax returns to take an additional standard deduction for the state and local property taxes that they pay. Earlier this week, Holt and Rep. Rahm Emanuel (IL-5) introduced their legislation to benefit more than 30 million homeowners – including 600,000 in New Jersey – who don’t currently claim an itemized deduction for real estate property taxes. The provision included in Chairman Charlie Rangel’s legislation includes a $300 deduction for single filers and $700 for joint filers. The provision is effective for 2008.
“Homeowners in New Jersey face the highest property taxes in the nation. To those who don’t itemize on their federal returns, this is a way to provide them with some relief,” Holt said. “I’m pleased that Chairman Rangel and his Committee agree with us, and have included property tax relief in their legislation.”
In 2005, there were 72.3 million owner-occupied households in the United States, but only 40.5 million taxpayers claimed an itemized deduction for real estate property taxes. The more than 30 million homeowners who don’t currently benefit from property tax deductions include elderly homeowners who no longer itemize in order to receive a mortgage interest deduction, but are still subject to high property taxes.
The standard federal tax deduction is adjusted each year for inflation, but that adjustment does not take into account rising property tax values and increases. Based on Census data, the total amount of state and local property taxes paid in the United States increased by 50 percent from 2000 to 2006. Over the same period of time, inflation increased by only 17 percent. Over that time, median household income actually dropped by 2 percent.
