Standing With Brand New LI Homeowners, Schumer Pushes To Keep In Place Vital Federal Deductions LI Depends On; Pledges Fight
LI Locals Have Expressed Serious Worries with Secretary Mnuchin & Future of Critical Deductions; Schumer-Backed Deductions Help LI Families Pay Mortgage, State & Local Taxes
Schumer: LI Homeowners Cannot Afford a Giant Tax Increase Courtesy Of the Feds
New York – (RealEstateRama) — Standing with brand new Long Island homeowners, and amidst rising local anxiety about looming tax proposals, U.S. Senator Charles E. Schumer today launched a push to preserve very popular and essential, but, nevertheless, at-risk tax deductions Long Island homeowners and taxpayers depend upon to keep LI’s high cost of living in-check. Whether new Long Island homeowners, longtime owners, or those looking to buy right now, Schumer explained that locals are in tax jeopardy as newly-confirmed U.S.
Treasury Secretary Mnuchin and many Republicans in Congress have suggested limiting or eliminating the mortgage interest and state and local property tax deductions. Schumer said that reductions to—or the removing of these sorts of tax deductions—would hit LI particularly hard, given the high local cost of owning a home. Schumer has pledged to fight any efforts that would rollback critical savings deductions used by Long Island homeowners and taxpayers.
“Long Islanders have sounded the alarm about looming threats to both the mortgage interest and state – and-local tax deductions – vital policies that keep the local cost of living in check for already hard-hit Long Island homeowners. I hear you loud and clear and I will aggressively fight any push to kill these policies that benefit and build the American middle class,” said U.S. Senator Charles Schumer. “Treasury Secretary Mnuchin and many in Congress, especially in the House, just do not understand the critical need for federal tax deductions that Long Island homeowners depend on to make ends meet. Eliminating, or even reducing, these deductions would absolutely hammer hardworking Long Island homeowners right off the bat, and it would dissuade those looking to purchase a home on Long Island. I will use my clout in the Senate to fight all efforts that would roll back the critical mortgage-interest deduction and the state and local property tax deductions.”
Kevin S. Law, President & CEO of the Long Island Association said, “The potential elimination or capping of the deductions for mortgage interest and state and local taxes on federal tax returns would be devastating to our region, weakening the real estate market and stunting economic growth, and thus we commend Senator Schumer for vigorously opposing any plans to inequitably change the tax code on the backs of Long Islanders.”
Peter Elkowitz Executive Director of the Long Island Housing Partnership said, “The mortgage interest deduction is critical to a high cost area such as Long Island. The elimination of this deduction would be very harmful to the Long Island region to retain our existing and future homeowners.”
Under the current federal tax system, taxpayers who itemize deductions on their federal income tax returns can deduct state and local real estate and personal property taxes as well as either income taxes or general sales taxes. State and local income and real estate taxes make up approximately sixty percent of local and state tax deductions while sales tax and personal property taxes make up the remainder. According to the Tax Policy Center, approximately one-third of tax filers itemize deductions on their federal income tax returns. The mortgage interest tax deduction allows borrowers to deduct the interest paid on their home loans from their income taxes. Homeowners who itemize their taxes can deduct mortgage interest payments on up to $1 million for married couples and $500,000 for those filing separately. According to the Tax Policy Center, approximately 40 million households in the United States benefit from the mortgage interest deduction.
“Taking away or reducing these deductions on federal tax returns would be brutally unfair and would hit Long Island homeowners right between the eyes. It is exactly the wrong thing to do if we are serious about helping to build and expand the middle class,” added Schumer.
Schumer said that such a move could significantly impact Long Island, where the rate for home ownership is 80 percent and the cost of living is high. For instance, according to the NYS Department of Taxation and Finance, the median residential home sale price in Nassau County was $445,000 in 2015; in Suffolk County the median residential home price was $360,000 in 2015. ?According to the Tax Policy Center, between 2007-2011, the average annual property tax burden was $9,080 in Nassau County and in $7,600 in Suffolk County. According to the IRS, in 2014, approximately 1.9 million New Yorkers filed for the mortgage interest deduction each year and 2.37 million New Yorkers filed for the real estate tax deduction.
In December, the Long Island Association (LIA) raised concerns about eliminating the mortgage interest deduction. LIA says that reducing or eliminating the mortgage interest deduction could create another barrier for first time homeowners and significantly impact the residential real estate market on Long Island.