It would appear as though the National Association of Home Builders (NAHB) is willing to dump the interest deduction tax benefit for homeowners. How in the world could that even be possible?
Here is the link to the WSJ article: CLICK HERE
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The 30% is probably because (by now) most homeowner’s should have an interest rate below 5%. With rates at these levels for so long, oftentimes the interest and property taxes don’t exceed the standard deduction amount. So for the “typical”, white picket fence, two and a half kids, one dog or cat, W2 employee homeowner, their numbers don’t add up to be able to itemize deductions. A 4% rate on a $200,000 loan is only 8 grand in interest paid. Throw in a few thousand for taxes, and you are still under the standard deduction amount. It’s just numbers…
THe general rule of thumb that I have used for what homeownership was worth in a tax break was 1.5 mortgage payments.
A corporate tax cut sounds frigging awesome to me
Matt is correct. The standard deduction for a married couple filing jointly is $12,700, and for a head of household $9,350. This often far exceeds the itemized deductions for the MID and R/E taxes. And with the new tax plan these standard deductions may double effectively making a tax return for 80% of the country a two page return. I would gladly trade the elimination of the MID (and other special interest deductions) in exchange for a lower rate.
What gets me is the “willing to” think about giving tax breaks to those that are looking to buy. As we all know there are no guarantees and do we believe that this will materialize? Or do we give everyone the deduction so that everyone can save money and give a reason to buy. Ashamed that NAHB would be so selfish to do this. There is a reason I didn’t renew my membership in the local group. Thanks for sharing the information.
This is all well and good for married couples. But again, the single homeowner will lose the only real deduction the have. So, with people marrying later this could absolutely impact the homeownership rate. Not to mention couples who divorce and Seniors who may be widows or widowers. Again, they fail to take into consideration the big picture.
The mortgage interest tax deduction is and always has been a joke. A ploy for real estate agents to sell homes and mortgage brokers to make loans. I have been a Real Estate Broker and Mortgage Broker for 40 years, and mortgage interest tax deduction rarely pencils out. Sadly most of our tax rule and deductions are for the benefit of special interest groups. If you really want to help lower taxes for everyone in the country will everyone paying their fair share; then establish a 5% tax bracket for income to $50K, 7% tax bracket for income to $150K, and 10% for all income over $150K. AND then eliminate ALL tax deductions. Now you really can do your tax returns on a post card and everyone will be paying something will no one riding on the coattails of the rest of us.
Michael for President!! Been saying this for years!