President's Tax Panel Targets HELOCs AndSecond Homes
WASHINGTON - (10/19/05) -- The president's tax reform panel isrecommending that federal income tax deductibility for home equityloans and second homes be eliminated under any proposals for taxreform. At a public hearing Tuesday discussing major changes to theU.S. tax code, panel member Elizabeth Garrett noted that thecurrent mortgage interest deduction would be changed to a 'homecredit' where 'up to' 15% of mortgage interest paid to build oracquire a home would count as a tax credit. The panel reiterated apreviously disclosed recommendation to cap the mortgage interestdeduction at loan sizes of about $300,000 from the current $1million level. The panel also wants to eliminate the taxdeductibility status of local real estate taxes. Jeffrey Zeltzer,president of the National Home Equity Mortgage Association, saidhis trade group is against eliminating the current tax breaks forHELOCs. "For the middle class what else is there?" he asked. "Wedisagree with the idea."