Congress has just toted up the billions in taxes America's homeowners will save this year through various federal housing write-offs and credits. The number is huge and the underlying message is loud and clear: If you don't own a home, you are missing out on Congress's most generous lump of tax goodies served up to any category of individual taxpayers.

Here's what the Congressional Joint Committee on Taxation estimates homeowners will keep in their pockets in 2005, rather than sending to Washington:

• $72.6 billion in interest deductions on owner-occupied homes. Federal tax law allows owners to write off interest payments on up to $1.1 million in debt on a qualified principal residence.
• $22.9 billion from the exclusion of capital gains on sales of principal residences. Owners who use a house as their principal residence and then sell it for a gain after two years can exclude up to $250,000 (single filers) or up to $500,000 in sale profits. Sellers who have owned and used a property as a principal residence for less than two years may be able to qualify for a partial exclusion.
• $19.6 billion for write-offs of local property taxes on owner-occupied homes. Given the rapid escalation of assessments in many markets around the country, this category of write-off benefit is booming.
• $1.2 billion in interest exclusions on state and local government bonds that finance moderate-cost "affordable housing" programs for owner-occupants. Typically the savings reaped on the local governments' low tax-exempt borrowing costs in the bond market are passed along to home buyers through lower interest rate.

Add in a handful of related housing tax subsidies--$4.7 billion in federal tax credits for low-income housing, $3.8 billion for certain "excess" rental housing depreciation write-offs, $0.3 billion in rental housing bond subsidies, and $0.3 billion in tax credits for historic structure rehabilitations—and the total direct federal tax benefits to housing are expected to exceed a record $125 billion for the year, according to the joint tax committee.

These deductions and credits not only remain in homeowners' pockets in the form of foregone federal taxes, they also increase the financial attractiveness of homeownership and ultimately the market values of houses.

How do the tax goodies get split up among homeowners? As you might expect, people with larger home note and higher property taxes get to write off more and save more than homeowners with small loans and low property taxes.

Using data from the 2004 tax year usage of interest deductions as computed by the IRS, here is how the pie got sliced:

• Taxpayers in the highest income brackets--$200,000 and above—accounted for less than 1 % of all homeowners claiming interest write-offs in 2004, but they received a whopping 22 % of the $70.2 billion total for the year.
• Homeowning households with incomes of between $100,000-$200,000 pocketed 33 % of the tax savings, but represented 19.8 % of all homeowners who took deductions.
• Homeowners in the $75,000-$100,000 income bracket were 19.3 % of the total number of taxpayers taking the interest write-off, but they received 18.2 % of the benefits.
• The lower down the income scale, the greater the disproportion of total write-off benefits you get. Homeowners with incomes of $50,000-$75,000 were 26 % of all homeowners claiming write-offs, but received just 16 % of the total. Taxpayers with $30,000-$40,000 incomes represented 9.4 % of all homeowners taking interest deductions last year, but pocketed just 3.1 % of total interest tax subsidies.

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