NAR Opposes the Trump tax plan with respect to Mortgage Interest Deduction.
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Homeowners will still be able to deduct the interest on the first $500,000 in load debt. What percentage of the population has over $500,000 in home mortgage debt? And those that do still get the deduction. Just not on the portion over $500,000. So now those homeowners are going to choose to rent rather than own? Not likely.
Maybe, just maybe, all you real estate agents that never heard a buyer say they wanted the tax deduction when buying the home should have pointed that out to them! Who, in their right mind wouldn’t want to write off several thousand dollars in taxes? I have been selling homes for 38+ years professionally and I tell EVERYONE of my clients about the write-off of the taxes and interest paid so they can be aware of the savings it will generate for them. Not doing so is just criminal on the part of the agent in my humble opinion!!! Keep harping on this guys, IT’S CRITICALLY IMPORTANT!!! Good show.
Oh you’re such naughty little boys. Unsubscribe pamela@pamelacrawford.com
a big kadoo about nothing. If you can afford $500,000 mortgage, property tax deduction probably doesn’t really matter other than another nice perk in life
Isn’t the number of taxpayers who itemize roughly 30%? I would imagine that their is a direct correlation in income and therefore size of mortgage loan with those who itemize and those who take the standard deduction. Low rates, less deductible interest…unless rates start going up… dun dun dunnnnnn!
Hi Guys, this reduction in a tax deduction from $1mil down to $500k, seriously people! how many people you know if the “Middle Class” have mortgages over $500,000.
“Rock Solid Answer” wrote exactly what I was thinking. $500,000 max is unfair in California and other parts of the country. The average home price in California is approaching $700,000. This will hurt the middle class here.
Taxes are a big part of the decision to buy a home in NJ. Both as far as what is affordable to a first time buyer and for the empty nester down sizing. Property taxes don’t ever go down and the ability to deduct them on your federal taxes is a very big deal here. When combined with the mortgage interest deduction is a sizable deduction for people in NJ. I think losing the ability to deduct your local real estate taxes is a bigger deal than the over $500k interest on a loan for most people.
PLUS, many folks don’t want to have to itemize just to get the smaller mortgage deduction. THE POINT guys is folks in California will WANT the deduction, us in Texas, we don’t care so much….our home values are regional.
So far everyone is missing the best solution on this. Cost of living varies WILDLY depending not only on state but county, city and neighborhood. To have one size fits all tax brackets and loan size limits for mortgage interest deduction for the entire United States is insanity. You could be a family of four making 300K per year in San Francisco or Silicon Valley and be living a middle class lifestyle. That same family of four with a 300K per year income in Wisconsin puts you into the lap of luxury. Either a flat tax (say 10 or 15%) of income or a more complicated but fair sliding scale tax rate based on cost of living by zip code or census tract would be the only fair way. The NINE most populous states have around HALF of the entire US population. Just because most of the states aren’t high cost doesn’t mean most of the population doesn’t live in high cost areas. The same rules should apply to government services like welfare etc. You should not be penalized (or unjustly given a free ride) solely because the government does not take into account the cost of living where you live.
The bigger concern will be the taxpayers in high tax states such as CA & NY who will no longer be able to deduct their state income taxes. This will affect many more individuals than the reduction in the interest rate deduction.
As a matter of perspective, the $1,000,000 limit for a qualified interest deduction was set 30 years ago. HR 3545 Omnibus Budget Reconciliation Act of 1987 set the limit of $1,000,000 in December 1987 (see Title X page 386 of HR 3545 from the 100th Congress) which now resides under 26 US Code 163-Interest (h)(3)(B)(ii). At that time, the CPI index in the United States was 115.400. As of September 2017, CPI stands at 246.819 making this a simple math equation $1,000,000/115.400 = x/246.819. According to standards set forth in 1987, the qualified interest deduction should be increased to $2,138,812.
Fha loans are definitely not helping anyone besides FHA
they are a large monthly fee to homeowners…For the life of the loan
if they economy drops….there is no chance to refinance out of the loans
If the Tax Deduction was the single driver in people buying homes, then people not being able to maximize or take any deduction on interest would not be buying homes and we know that is not the case. If the change goes through it sounds like it will not impact the majority, and if your dollar and the economy is stronger and your wages go up and your equity investments keep moving up and the tradeoff is the Mortgage Interest Deduction then for many it may be a gain or no change at all to their quality of life. Realtors to often use this to push buyers into the maximum home at the buyers income and ratios. Maybe the Government should cut into their 6% Commission or charge a higher income tax on anything over 4 % ? Low interest rates in addition to the tax deduction are factors in property values moving up, so if the deduction goes away and it brings down INFLATED VALUES for home buyers and specifically first time home buyers that may not be a bad thing. I am not all in favor of the deduction going away, staying or changing, I just think it needs to be looked at from multiple angles.