Policy Agenda for Housing?

For housing policy, at the end of 2012, the current tax exemption on phantom income arising from cancelled/forgiven principal residence mortgage debt expires.

Due to heated budget debates during the second half of last year, Congress failed to approve a 2011 tax extenders bill, legislation that typically extends certain business and individual tax rules that expire every year or two.

This development sets up a policy fight in 2012 during which advocates will seek a retroactive extension of now-expired tax rules.

The section 25C tax credit for energy-efficient remodeling expired at the end of 2011. In its weakened 2011 form, this tax credit offered homeowners an up to $500 benefit for improving an existing home with qualified energy-efficient property, such as windows, doors, HVAC equipment and insulation.

The section 45L tax credit for new energy-efficient homes also expired. This tax credit is equal to $2,000 per home for builders of for-sale or for-lease housing units that achieve a 50 percent reduction in heating and cooling consumption relative to the 2004 supplement of the 2003 IECC.

Among other effects, expiration of this tax rule would also further hinder mortgage workout and mitigation programs.

- Courtesy of NAHB