Two congressmen reintroduced a bill that would prevent boat owners from writing off mortgage interest payments if they classify boats as second homes.
U.S. Reps. Tim Walz, D-Minn., and Mike Quigley, D-Ill., reintroduced legislation to eliminate what it calls “taxpayer subsidies for luxury yachts.”
But Jim Coburn, managing partner at Coburn and Associates LLC and a longtime member of the National Marine Bankers Association, said the measure won’t affect the super-rich, as intended, but middle-class boat owners.
“They’re touting the fat cat thing, but what I find funny or interesting about the deduction for boats is, those aren’t the people using their boats as second deductions,” Coburn told Soundings. “The middle class is using them on their 25-footers. These are not liveaboards. The cap for the deduction is up to $1.1 million, so this wouldn’t apply to those yachts. The wealthy are already using that for second mortgages.”
Coburn said the bill would hurt already floundering boat sales if it passes.
“The industry would be hurt by this because sales would, I don’t know if they’d plummet, but it would affect sales in a negative way, and that affects jobs,” Coburn said. “This does the opposite of what they want to do.”
If Congress is against second-mortgage deductions, it should be applied across the board and not just to boats, Coburn said.
“I guess I have a problem with the government focusing on boats when that doesn’t really address the issue of second mortgages,” Coburn said. “If you’re going to eliminate it for the reasons that Congress put forth, you have to eliminate it all.”
Currently, taxpayers are allowed to deduct mortgage interest for as many as two homes from their tax returns. Yachts equipped with bedding, toilet facilities and a kitchen qualify, even if they aren’t used as a primary residence. The Ending Taxpayer Subsidies for Yachts Act would limit the tax deduction to those who use their boats as a primary residence.
— Reagan Haynes