You better hope and pray that some how the housing industry is able to appeal to Congress to leave their hands off the mortgage interest deduction for home owners. It's hard to imagine but several members of Congress have proposed to end the mortgage interest deduction along with several other housing-related tax breaks. Once again, RIS MEDIA has a pertinent article that affects all home owners and those considering the purchase of home ownership. This is an important subject and I share it with you today. Please encourage and appeal to your congressman to leave the deductions alone.
RISMEDIA, January 18, 2011—(MCT)—The housing industry is girding for a fight in Congress to protect the mortgage interest deduction, along with a number of other housing-related tax breaks. The National Association of Home Builders is putting a high priority on lobbying in favor of the mortgage interest deduction, along with breaks such as the capital-gains exclusion on home sales, and has already created a website, http://www.savemymortgageinterestdeduction.com, to begin rallying public support behind its position.
“This is a huge benefit for 35 million taxpayers a year. And the biggest beneficiaries are middle-class families and younger home buyers,” said Robert Dietz, who oversees tax policy and issues for the NAHB.
The mortgage interest deduction has come under scrutiny before, but housing groups have always united against attempts to do away with it. The National Association of REALTORS® and the Mortgage Bankers Association are two other powerful lobbies that have opposed those efforts in the past.
“There are a couple of sacred cows in the tax code, and the mortgage interest deduction is one of those. Politicians take it on at their own risk,” said J. P. Delmore, the senior federal legislative director for the home builders’ group.
The builders were worried enough about the tax situation that they excluded the media from their recent sessions on tax policy at the 2011 International Builders Show in order to formulate strategy.
In a news conference, Dietz and Delmore touched on at least some of what that strategy will entail. “Without question, we will be very aggressive in the media, and we are prepared to do that,” Delmore said.
Another key point housing groups will focus on is the still-shaky state of the housing market. Although estimates vary widely on what elimination of the mortgage interest deduction could mean to home sales, Dietz said at least one analysis shows home prices falling 15% in that event.
But Delmore believes some sort of tax legislation is likely to advance in Congress either this year or next as lawmakers contend with mounting deficits, a presidential commission’s recommendations for reform and the 2012 expiration of tax breaks that Congress merely extended late last year.
One idea being floated is to replace the interest deduction with a 12% tax credit, but Delmore pointed out that for many middle-class taxpayers in the 25% tax bracket, that would amount to a 50% cut.
And any elimination of the capital-gains exclusion could harm older American homeowners, many of whom bank on the equity in their home to bolster retirement savings and need to sell to cash out, Dietz said.
“Any changes will have a huge impact on current and future homeowners,” Delmore said. “Any tax reform would have to be pushed like the health care reform was pushed, or it will fizzle out.”
Delmore said that President Barack Obama’s upcoming State of the Union address could provide clues as to how much impetus tax reform will get this year. The speech is set for January 25.
Sara Hibbard is a licensed Realtor in the state of Georgia. Sara works with folks thinking about buying or selling a home in the north Atlanta metro area. Sara looks forward to answering your many questions regarding the Atlanta metro real estate market in general or specifics regarding the buying / selling process. Sara is easily reached at 770-399-8108 or e-mail her at sara@sarahibbard.com. Sara Hibbard is Glad Georgia Real Estate Is On Your Mind!
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