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The interest deduction was supposed to help people achieve the America Dream of owning a house. Owning a home is more permanent than renting. It helps form stable communities.
When more people paid income tax, when interest rates were higher, when the soldiers and sailors came back from WWII it worked. Today, from the information posters have provided, the case for it looks much weaker.
Why home owners should be subsidized while renter were not was always a counter argument. In the event, it was proven wrong. But in todays world it carries more weight.
I say do away with it now, when the need for it has diminished and the arguments against it are more valid.
The interest deduction was supposed to help people achieve the America Dream of owning a house. Owning a home is more permanent than renting. It helps form stable communities.
When more people paid income tax, when interest rates were higher, when the soldiers and sailors came back from WWII it worked. Today, from the information posters have provided, the case for it looks much weaker.
Why home owners should be subsidized while renter were not was always a counter argument. In the event, it was proven wrong. But in todays world it carries more weight.
I say do away with it now, when the need for it has diminished and the arguments against it are more valid.
Renting under rent control is more permanent than renting without rent control. It helps form stable communities.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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When the new homes start at 1.1 million as they do here, the mortgage interest, even at 3.5% will result in a big tax deduction of about $60,000/year. We owe less than $300k and still deduct about $10,000. Yes, the elimination of that deduction will have a huge impact on new home sales, and also s significant impact on existing home sales, both costing jobs not only in construction, but in the real estate and mortgage industries.
It certainly can have an impact and if it does it should at the more expensive end of the market. As stated about half of homeowners, with a mortgage do not take the mortgage interest deduction. That's likely on the lower end of the housing market. The tax benefit is often way oversold anyhow by people who either don't understand how it works or simply sell real estate
Simply eliminating the deduction would suddenly put millions of current homeowners behind the eight-ball. Having purchased their homes at prices that assumed a 25% or so tax subsidy, they will not be able to afford a sale to buyers who do not have access to such a subsidy. Instead of being a wealth-building strategy, home ownership would become a wealth-destroying strategy. That would nor be a positive thing.
Tax incentives weren't a factor in my home purchase. They are a nice "after the fact", but if they went away, it wouldn't really affect our ability to own our home.
When the new homes start at 1.1 million as they do here, the mortgage interest, even at 3.5% will result in a big tax deduction of about $60,000/year. We owe less than $300k and still deduct about $10,000. Yes, the elimination of that deduction will have a huge impact on new home sales, and also s significant impact on existing home sales, both costing jobs not only in construction, but in the real estate and mortgage industries.
The tax deductibility helped make that situation. Without it people would think twice before moving to over-priced areas and houses in them wouldn't be fetching as much.
Free market, how do people own homes to even take a mortgage deduction?!?!? With the rent prices and evil landlords, how could they have ever broken free from the shackles?
Tax deductions don't drive home purchases. The tail doesn't wag the dog.
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