WASHINGTON - Hundreds of thousands of homeowners in New York, New Jersey, and Connecticut will get help from a little-noticed piece of the big foreclosure rescue package passed by Congress last month, one designed to help not owners in danger of losing their homes but those who've lived in them for decades.
Democrats added language to the massive housing bill that will allow people who don't itemize their taxes to take a standard deduction for property taxes.
That could mean a smaller tax bite for 1.4 million homeowners in New York, half a million in New Jersey, and more than 200,000 in Connecticut. The figures are rough estimates based on census numbers and other data from 2005.
Most likely to benefit from the change are seniors who have paid off most or all of their mortgage and, for that reason, have stopped itemizing deductions on their taxes. It will also likely be a bigger benefit for lower- and middle-income filers, since they often do not itemize.
A single filer will get a $500 deduction on state and local property taxes, a couple filing jointly will get $1000.
Lawmakers in the East Coast states - where property taxes tend to be much higher than the national average - are championing the measure.
“I don't think it's dawned on people yet, but I think it will be most welcome, and probably have some economic stimulative effect,” said Rep. Rush Holt, D-N.J., who offered the measure in the House.
Holt said high property taxes is one of the biggest voter concerns in his district, but a difficult one to address because the taxes are collected by local authorities.
“There's not much we can do to lower the taxes at the county or the state level, but this deduction is a useful way I think to relieve this burden,” he said.
New Jersey, Connecticut, and New York are ranked first, second, and fourth respectively in the amount of property tax paid annually per person, according to an analysis by the DC-based Tax Foundation. The rankings are based on data from budget year 2005, the most recent available.
“With property taxes shooting through the roof and incomes failing to keep pace, New York homeowners need help to ensure that the affordable and middle-class housing that is our bedrock doesn't become a bygone dream,” said New York Sen. Charles Schumer, a Democrat.
The senator has long argued that voters who complain about taxes are often most frustrated by the property tax, a distinctly local, non-federal issue.
Late last month, Congress finished the housing bill intended to rescue about 15 percent of the cash-strapped homeowners under threat of foreclosure in the next year or so.
The legislation is regarded as the most significant housing bill in decades. It won approval from lawmakers eager in an election year to come up with an answer to the growing housing crisis.
The measure includes $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners; $3.9 billion for communities to fix up foreclosed properties causing blight in neighborhoods; and $15 billion in tax cuts, including an expanded low-income housing tax credit and a credit of up to $7,500, to be repaid, for some first-time home buyers.
The number of homeowners who could lose their homes to foreclosure by the end of 2009 is estimated by some to be around 2.8 million. Under the legislation, 400,000 having trouble with payments could avoid it by trading their loans for new, more affordable mortgages through the Federal Housing Administration.
That could mean a smaller tax bite for 1.4 million homeowners in New York, half a million in New Jersey, and more than 200,000 in Connecticut. The figures are rough estimates based on census numbers and other data from 2005.
Most likely to benefit from the change are seniors who have paid off most or all of their mortgage and, for that reason, have stopped itemizing deductions on their taxes. It will also likely be a bigger benefit for lower- and middle-income filers, since they often do not itemize.
A single filer will get a $500 deduction on state and local property taxes, a couple filing jointly will get $1000.
Lawmakers in the East Coast states - where property taxes tend to be much higher than the national average - are championing the measure.
“I don't think it's dawned on people yet, but I think it will be most welcome, and probably have some economic stimulative effect,” said Rep. Rush Holt, D-N.J., who offered the measure in the House.
Holt said high property taxes is one of the biggest voter concerns in his district, but a difficult one to address because the taxes are collected by local authorities.
“There's not much we can do to lower the taxes at the county or the state level, but this deduction is a useful way I think to relieve this burden,” he said.
New Jersey, Connecticut, and New York are ranked first, second, and fourth respectively in the amount of property tax paid annually per person, according to an analysis by the DC-based Tax Foundation. The rankings are based on data from budget year 2005, the most recent available.
“With property taxes shooting through the roof and incomes failing to keep pace, New York homeowners need help to ensure that the affordable and middle-class housing that is our bedrock doesn't become a bygone dream,” said New York Sen. Charles Schumer, a Democrat.
The senator has long argued that voters who complain about taxes are often most frustrated by the property tax, a distinctly local, non-federal issue.
Late last month, Congress finished the housing bill intended to rescue about 15 percent of the cash-strapped homeowners under threat of foreclosure in the next year or so.
The legislation is regarded as the most significant housing bill in decades. It won approval from lawmakers eager in an election year to come up with an answer to the growing housing crisis.
The measure includes $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners; $3.9 billion for communities to fix up foreclosed properties causing blight in neighborhoods; and $15 billion in tax cuts, including an expanded low-income housing tax credit and a credit of up to $7,500, to be repaid, for some first-time home buyers.
The number of homeowners who could lose their homes to foreclosure by the end of 2009 is estimated by some to be around 2.8 million. Under the legislation, 400,000 having trouble with payments could avoid it by trading their loans for new, more affordable mortgages through the Federal Housing Administration.
