Congress has just toted up the billions in taxes America's homeowners will save this year through various federal housing writeoffs 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 mortgage interest deductions on owner-occupied homes. Federal tax law allows owners to write off interest payments on up to $1.1 million in mortgage 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 writeoffs of local property taxes on owner-occupied homes. Given the rapid escalation of assessments in many markets around the country, this category of writeoff 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 mortgages.

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 writeoffs, $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 bigger mortgages 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 mortgage 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 percent of all homeowners claiming mortgage interest writeoffs in 2004, but they received a whopping 22 percent of the $70.2 billion total for the year.

• Homeowning households with incomes of between $100,000-$200,000 pocketed 33 percent of the tax savings, but represented 19.8 percent of all homeowners who took deductions.

• Homeowners in the $75,000-$100,000 income bracket were 19.3 percent of the total number of taxpayers taking the mortgage interest writeoff, but they received 18.2 percent of the benefits.

• The lower down the income scale, the greater the disproportion of total writeoff benefits you get. Homeowners with incomes of $50,000-$75,000 were 26 percent of all homeowners claiming writeoffs, but received just 16 percent of the total. Taxpayers with $30,000-$40,000 incomes represented 9.4 percent of all homeowners taking mortgage deductions last year, but pocketed just 3.1 percent of total mortgage interest tax subsidies.

Published: January 31, 2005

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.