Contemplating leaving your community association because of the association’s fees? Read up on this up-and-coming bill and think again, because with your influence, there is a strong chance you could receive a tax break in the near future.
On March 3, 2016, Representatives Eshoo and Thompson (both D-CA) introduced the Helping Our Middle-Income Earners (HOME) Act, H.R. 4696. You can read the bill in its entirety here.
The bill acknowledges that there are millions of middle class homeowners out there that contend with growing expenses in all parts of life, such as: child care, college tuition, health care, mortgage, community assessments, and more. If passed, the bill would allow homeowners living in community associations who earn $115,000 or less in annual income, or $150,000 on joint returns to deduct up to $5,000.00 of their association fees and assessments from their federal tax liability.
As a firm that supports community associations, we at AriasBosinger believe the HOME Act will greatly benefit not just the homeowners who pay association fees, but the associations as well. There is no doubting the financial inequities placed upon homeowners in community communities – they pay not only the fees associated with their community, but also local property taxes for municipal services that benefit owners outside of their communities. The general public also reaps the benefits of association beautified sidewalks, bike paths, roadways, signs, ponds, and other outdoor features without having to fund them.
Community associations also have to contract separately for their trash and snow removal services, infrastructure repairs and maintenance, street lights, signage, and more. Essentially, those who live in a community associations are paying for these services twice over, and only benefiting once over, effectively throwing some of their well-earned money away.
On the other hand, offsetting the costs homeowners incur as a result of community association fees could have a benefit for the associations as well by reducing assessment delinquencies and the incentive for homeowners to abandon their mortgages and properties. That extra money would make a world of a difference in their communities and would allow for better funding and capabilities. Every homeowner living in a community association should support this bill.
The HOME Act is still in the committee stage and has not gone to the house floor for a vote. Any support, in particular bi-partisan support, is crucial for the HOME Act to make it out of committee. As your local community association attorneys, we strongly support this bill, and urge you to contact your legislator and other committee members to voice your support. You can contact your representative through the CAI website here to ask them to co-sponsor the HOME Act. You can make a difference!