HB 4136
Disallows, for purposes of personal income taxation, a mortgage interest deduction for a residence other than the taxpayer's principal residence, unless the taxpayer sells the residence or actively markets the residence for sale.
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Sign in to take actionPublic sentiment
Support
57%
Oppose
43%
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill changes how mortgage interest deductions are treated for personal income taxes in Oregon. It limits the deduction for a second home to only those years the taxpayer sells it or actively markets it for sale. The bill also establishes a new state account, the Oregon Homeownership Opportunity Account, which will receive revenue generated by this restriction and be used to provide down payment assistance for homebuyers. This change takes effect on the 91st day after the legislative session ends and applies to tax years starting January 1, 2026.
Sponsors
Official sponsors from legislative records.
Primary sponsors
Cosponsors
Arguments in favor
Reasons to support this legislation.
The supporters of House Bill 4136 generally agree that the measure is crucial in addressing the housing crisis in Oregon, particularly in coastal and rural communities. They argue that the bill provides a reliable funding source for down payment assistance, which can help overcome barriers to homeownership such as record home prices, limited housing supply, and high interest rates. By expanding access to homeownership for first-time and first-generation buyers, the bill aims to strengthen families, local housing markets, and communities, ultimately contributing to economic mobility and stability. Many the importance of addressing the challenge of assembling a down payment, citing personal experiences and highlighting the effectiveness of down payment assistance programs in creating stability in communities.
Source: Testimony Summaries
Arguments opposed
Reasons to oppose this legislation.
Opponents of the proposed legislation express concerns that it would have unintended negative consequences, particularly for current homeowners who rely on the mortgage interest deduction to manage fixed costs. They argue that eliminating or reducing this deduction would disproportionately affect middle-class Oregonians with modest second homes or family cabins, leading to significant tax hikes and potentially thousands of dollars in annual state taxes. Additionally, opponents believe that the bill's provisions may lead to increased costs for small businesses, negatively impact local economies, and exacerbate Oregon's affordability crisis. Some testifiers also express concerns about the potential impact on working families, retirees, and individuals with seasonal homes, particularly during transitional periods or family caregiving.
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