Sunday, April 14, 2013

Federal Tax Expenditures for Housing Total $1.6 Trillion from 2014-2018, Annual Mortgage Interest Deduction Costs Projected to Grow by $55 Billion.

The 2014 Budget includes a tax expenditure worksheet HERE

I pulled out housing related tax expenditures (broken out for corporations and individuals) and did some calculations in a 3 page legal sized worksheet on my SkyDrive HERE and embedded below. 

My worksheet starts with graph comparing growth in mortgage interest and LIHTC costs from 2012-2018, a table with all housing related tax expenditure costs begins in row 24; note that $$ in table are in millions so add 6 zeroes to a $100,000 entry =$100 billion.

Some observations:
  1. Total housing tax expenditures for 5 years 2014-2018 are estimated at $1.6 Trillion, a growth of $106 billion annually/ 38%.
  2. Mortgage interest tax expenditures are expected to grow by $55 billion annually from 2014-2018, reaching nearly $157 billion annually in 2018, a growth of 55%.
  3. LIHTC expenditures are expected to grow by 9%/$770 million during the same period, reaching $9 billion annually in 2018.
  4. Not included in tables, HUD's annual rental assistance cost is projected at $37.4 billion in the 2014 budget. (Except for LIHTC and SF and MF bonds, housing tax expenditures are not income targeted while HUD rental assistance is highly income targeted).

Originally created and posted on the Oregon Housing Blog.

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