BluefoxToday blog : Mortgage interest write-off and carbon tax revisited

Mortgage interest write-off and carbon tax revisited


Cut CO2A few weeks ago a House committee leader in Washington floated a draft on taking away mortgage interest deduction on houses over 3,000 sq.ft. in order to make housing more energy-efficient. His proposal at that time met with a mixed reaction from just about all sides.  

If you recall, it was only the first draft. Since then arguments have gone back and forth on the issue and new ideas have gained traction to a point that the flavor of the original proposal has changed somewhat. And it has become a little more detailed. For instance, a house from 3,000 to 3,199 sq. ft. would qualify for 85% of the interest write-off that now stands at 100%. And as the home size grows, the smaller the percentage. At the other end, any house over 4,200 sq.ft. wouldn't be eligible for any deduction at all.

The latest plan also includes some partial exemptions from this graduated scale, among them "historical homes" constructed before 1900, certified energy-efficient dwellings, farmhouses and homes whose owners buy carbon offsets in order to qualify as carbon neutral. The draft's aim is to cut our carbon emissions 60% by 2050.

Environmental and scientific institutes were initially skeptical about the draft's purpose and goals, but they have slowly come to put their arms around it. They now see it as a ground-breaking effort to decrease greenhouse-gas emissions and also direct needed attention to the current use of energy in the huge housing sector. It's the first major initiative to do something about this festering problem.

The National Association of Realtors, or NAR, and the National Association of Home Builders, or NAHB, have voiced their concerns about the proposal because it uses the square footage of homes as a measuring tool instead of their energy efficiency.

The all important thing is that the issue is being debated now and with that public awareness grows and eventually something will be done about it. What we need is action.

Photo by Shailendra Pandey


Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 10 commentsEsko Kiuru • October 19 2007 10:55PM


When I first read this, I thought, it isn't necessary, probably like many of the politicians.  But the more I think about it, it does make sense, BUT, like you said right at the end, square footage does not seem like a good 'rating' as it could be 5000 sq ft, but be highly efficient and thereby use less energy than a much smaller home.  This might be a good proposal, but it needs modifications!


Posted by Ronald Gillis, CNSA Southwest Florida. Notaries, Port Charlotte, 941-7-NOTARY (Southwest Florida Notaries (Mortgage Notary Signing Agent)) over 11 years ago
I don't think it's a good proposal at all.  As homeowners the tax advantage of writing off interest is a definite bonus.  Isn't that what we share with our clients?  Why should it matter what size home it is?  Chances are these larger homes are the newer ones that are more energy efficient anyway, with dual pane windows, etc.  The govt needs to look elsewhere for more revenue, not at the middle class homeowner that is already paying more than their fair share of taxes.
Posted by Linda Sanderson (Coldwell Banker Solano Pacific) over 11 years ago


At least someone brought up the issue of housing and energy efficiency. Now they can debate and find a solution.

Posted by Esko Kiuru over 11 years ago


This carbon tax actually would affect the most the well-to-do, not the middle class.

Posted by Esko Kiuru over 11 years ago
Esko - I am somewhat embarrassed that this was proposed by a representative of my state. I am glad housing and energy efficiency were brought up but the size of the home does not necessarily have anything to do with the efficiency of the home. The Herkelrath Project I have written so much about will be a highly efficient home. I'm certain homeowner Steves utility bills will be a fraction of what my bills are in my highly inefficient 1400 square foot home. Especially when he can get his wind generator operating again! Proposed legislation such as this is what makes our government so scary!
Posted by Mary McGraw, 2015: Solar Energy Is Still A Simple Machine! (GLREA) over 11 years ago
I still think it's a bad proposal even if it does only affect the upper class.  Size should not have anything to do with it.  BAD IDEA!
Posted by Linda Sanderson (Coldwell Banker Solano Pacific) over 11 years ago


Let's see how the debate goes.

Posted by Esko Kiuru over 11 years ago


The discussion has to start somewhere.

Posted by Esko Kiuru over 11 years ago
Yes, it's true we do have to start somewhere.  Hopefully the debate will bring about some change for the good. 
Posted by Linda Sanderson (Coldwell Banker Solano Pacific) over 11 years ago
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Posted by tjuakafp over 6 years ago