Renewal of Tax Breaks for Homeowners is Underway, but will it Come Soon Enough?

Affordability is one of the biggest factors when it comes to buying a home, and now more than ever affordability has put many homeowners’ dreams in jeopardy. While many would-be buyers are facing the challenges of rising prices and increasing interest rates, there are also many who are struggling to afford the house they already own. Today there is good news for those who are concerned about affording payments on their current home – the renewal of some federal tax benefits for homeowners has taken a great leap towards enactment.
tax break
Recently, the Senate Finance Committee gave their stamp of approval on a package of tax breaks which include a two-year reauthorization of the Mortgage Forgiveness Debt Relief Act – a provision which allows taxpayers to exclude income from the discharge of debt – as well as similar deductions for mortgage insurance premiums and energy-saving improvements to homes. This relief is essential to thousands of homeowners who have gone underwater on their mortgage and have received cancellation on a portion of their principal balance.

To the dismay of many, this package still has some pitfalls to overcome. While the committee has overwhelmingly approved the package, the full senate still has to pass the bill – a process which could take anywhere from weeks to months. It would appear that officials are in no rush to pass this bill either, as Ways and Means Committee Chairman Dave Camp has made it known that he plans on reforming the entire federal tax code permanently as opposed to reapproving smaller pieces like this on a yearly basis.

On top of this, there are fifty-some special interest tax benefits in the bill which all need to be examined one-by-one and debated among officials to determine whether or not they truly merit a place in the bill, and we’re likely to see two conflicting bills come from the House and Senate once this bill does make its rounds.

So how much can homeowners expect to benefit? Unfortunately it’s truly hard to say for now, as many of the provisions are likely to fall to Camp’s rigorous evaluation.

How much relief to homeowners do you expect to see when this bill is finally passed? What are your thoughts?

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