Congress Targets Second-Home Mortgage Deduction for Live-Aboards

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Attention on deck as another bill has been introduced at the federal level – with the short title that may be cited as the ‘‘Ending Taxpayer Subsidies for Yachts Act’’ – that would affect many boater owners in Newport Harbor.

HR 1702 has been introduced in the House of Representatives and referred to the Committee on Ways and Means. It would amend the Internal Revenue Code of 1986 to allow the mortgage interest deduction only for boats used as the principal residence of the taxpayer.  In other words, the second-home mortgage interest deduction would be eliminated for boats that are used as second homes, but still allowed for houses or recreational vehicles that are used as second homes.

I love the short title that implies boat owners somehow receive federal subsidies, but nothing is further from the truth, as boat owners contribute a lot to the economy. HR 1702 appears to be based on the fallacy that those who own boats are rich, cigar-smoking elitists, and that the American taxpayer is subsidizing their yachting lifestyle.  Yet, those owning second homes or recreational vehicles are the common average working middle class, so it is fine to subsidize them.

First, let me make it clear that no one is receiving a subsidy, just the ability to deduct from taxable income the mortgage interest on a second residence.  The question is; why does this bill only target boat owners?

To deduct mortgage interest, the vessel must have a sleeping quarter, a galley, and a head.  Locally, we call these floating condos, and Newport Harbor is filled with boats that rarely leave the slip, yet the owners regularly spend the weekends aboard their yachts.

The National Marine Manufacturers Association is calling on boaters to tell Congress it opposes a bill that would remove the deductibility of interest on boats that are used as second homes.

“This bill, the ‘Ending Taxpayer Subsidies for Yachts Act,’ is both misnamed and wrongheaded and would accomplish nothing except putting American boatbuilders and other boating services providers out of work, precisely at a time when the industry has not recovered from the worst downturn since the Great Depression,” said NMMA president Thom Dammrich.

“We know that a 26-footer is hardly what we all think of when we hear the word ‘yacht.’ Many a boat that can function as a second home on a lake or river fits the definition of ‘yacht.’ If land-sited dwellings and RVs can qualify for an interest deduction as a second home – and they can – why should a live-aboard boat be excluded simply because it floats on the water instead of being placed on land or driven down the highway?” Dammrich continued.

So, if the middle-income family decides to purchase a second home that floats then the deduction will not be allowed.  Boating generates a huge economic value, and stop for a moment to reflect on what an average boater spends for a weekend on groceries, fuel, restaurants, gift shops, fishing gear, bait, maintenance services – the list is endless.

Many communities have realized the economic benefit of boating – and its safe and family-orientated nature – by enticing boaters to their waterways.  Too bad our federal legislators are taking shots at boating and not the real issues affecting Americans.  To remove the mortgage deduction might be the tipping point where someone may opt to buy a second home or a RV in lieu of a boat, hence causing job losses in the marine industries.

Tip of week is I receive a plethora of weather related questions, and especially, “What will the sea condition be like next week for me to go to Catalina?”  I think that every prudent boater will check the conditions before venturing out, but as we know not everyone will and sometimes a day trip is spur-of-the-moment.  Therefore, I recommend boaters check the weather with their smart phones, or on their portable devices.  The National Weather Service at for our area will put the predictions and current conditions at your fingertips.

The Los Angeles/Oxnard National Weather Service Forecast Office has more online information available for the boater and landlubber then ever before.  Additionally, you can subscribe to RSS/XML feeds, sign up for tsunami messages, see hurricane tracking, view real-time radar,  and actually click on the floating weather buoys located at various positions out in the Pacific.  Tell me if you have a great marine weather website, and I will take a look at it for mentioning in an upcoming column.

And don’t forget: Tune in to the No. 1 boating radio talk show in the nation, Capt. Mike Whitehead’s Boathouse Radio Show, broadcasting coast-to-coast on the CRN Digital Talk Radio syndicated network every Saturday at noon, Pacific Time and replayed on Sunday at 10 am Pacific.  Join Chandler Bell and me as we talk about “all things boating.”  You can find the station listings, cable TV channels, live streaming on the Internet, and now available are apps to listen to the show for your iPhone, Blackberry, iTouch, Android, Palm, and Windows Mobile at or

Until next week, Safe Voyages!


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