Discussions at the federal level regarding the mortgage interest deduction and other housing-related tax policies should consider housing’s overall tax contribution, including property taxes, according to Robert Dietz, economist for the National Association of Home Builders.
Dietz notes that property tax collections did not significantly decline along with home values during the downturn, at least partially due to time lags between assessed values and market values, and therefore resulted in higher effective tax rates for homeowners.
Furthermore, because most housing-related taxes flow to local and state governments rather than the U.S. Treasury, housing’s contribution to taxes may be underestimated, Dietz added.
Source: U.S. News and World Report
