Home Mortgage Interest Tax Deduction Must be Retained

 

The income tax deduction for home mortgage interest payments should be retained.

Keeping this tax deduction in place is a way that taxpayers, real estate professionals and REALTORs®, can help to protect private property values.  

The Obama administration's recent deficit panel group proposal to eliminate the home mortgage income tax deduction is a dumb idea, which would seriously hurt home ownership, the economy, property values and all public agencies.

Huge U.S. government budget deficits have people worried, and President Obama formed a deficit commission study group to look at that.  This commission unveiled a controversial plan that would eliminate the home mortgage interest tax deduction, reduce Medicare and Social Security payments, cut the Federal workforce, lower U.S. income tax rates. 

But wait.  Eliminating the tax deductibility of home mortgage interest payments would have a huge adverse fiscal impact on the economy at state and local levels.

The National Association of REALTORs® strongly opposes the proposal to eliminate mortgage interest deduction.  "Housing is the engine that drives the economy, and to even mention reducing the tax benefits of homeownership could endanger property values. Home prices, particularly in high cost areas, could decline 15 percent if recommendations to convert the mortgage interest deduction to a tax credit are implemented," said Lawrence Yun of REALTOR®.org.

If U.S. Congress and government eliminate the home mortgage interest tax deduction in 2015 as suggested, this will probably happen:

• Fewer people will qualify to buy homes.
• Many homes will become less affordable.
• Decreased number of people will buy homes.
• Home prices will go down until new market balance price level is reached. 

But how long would that new market take to solidify?  And how low would home prices and values go?

• Prospective home buyers would anticipate this tax change, be even more nervous and stay on the sidelines. 
• Buyer reluctance would hurt the economy, home builders, real estate professionals, REALTORs®, mortgage brokers, construction workers, and property owners. 
• Fewer private sector jobs would be available.
• State and county governments would lose revenue from flat property tax rolls.
• California and some other states would run out of money.
• Funding for public schools, counties, and cities would be reduced further.  
• Local public agencies would run out of money.

Let's communicate with our U.S. government representatives and encourage them to retain the home mortgage income tax deduction, which is essential for stabile private property values.

Home buying and ownership is key for our economy recovery, and the home mortgage interest tax deduction is central to that. 

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Harrison K. Long - Business Solutions and Advisory - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - Phone: 949-854-7747  -  CA DRE 01410855

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We list and sell homes and properties at Orange County, California.  Thanks for contacting us with your ideas and questions about retaining the home mortgage income tax deduction and property rights and values at Orange County. 

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