Feb
24

Proposal To Reduce Mortgage Interest Deductions May Be Detrimental To Homeowners

February 24, 2011

legislation may affect Chocago real estate marketWith signs of a housing recovery slowly increasing, those in the Chicago real estate market should stay up-to-date with the latest news from the nation’s capital. In an effort to reduce the federal deficit, the government has proposed tax code changes to eliminate mortgage interest deductions and replace them with a 12 percent nonrefundable credit.

Since 1913, homeowners have been allowed to subtract mortgage interest when calculating their annual federal income tax. This incentive has been used by the government in its efforts to increase home ownership rates. According to research by the National Association of Home Builders (NAHB), these tax breaks are primarily utilized by middle-class taxpayers who make between $50,000 and $200,000. The organization revealed that eliminating the mortgage interest deductions would have a disproportionate impact on younger homeowners. It would also have a greater impact on larger families, as they currently receive larger benefits.

The NAHB has also mentioned the possibility of other provisions being at risk including: home equity loan interest deduction, property tax deduction, capital gains tax exclusion, low-income housing tax credit, and depreciation for residential rental property.

Even though the proposal to eliminate mortgage interest deductions is on the table, NAHB research shows that there is a large amount of public support for keeping the deductions in the tax code.

For more information about this issue and more, visit the NAHB website or go to http://savemymid.info.

About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

1 Comments

1

If the mortgage deduction is eliminated, the motivation to own a home would fall, especially where home values are not appreciating. Special interest groups will oppose even the smallest change.

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