Don’t Touch That!

The Presidents recently released budget plans to reduce high income earner’s tax deduction for mortgage interest payments. The plan is for taxpayers in the 33% and 35% tax brackets would only be able to deduct their mortgage interest payments at the 28% rate. It would affect those with taxable income of $250,000 and up and bring in $321 billion over 10 years. Commissions have called for eliminating the deductions in the past. But the proposals have gone nowhere and the same outcome is expected this year. The real estate industry for the mortgage interest deduction are making it clear to both Congress and the White House that they strongly oppose any limits to the deductions. The real estate industry is concerned that capping the deduction will hurt the housing market from rebounding. By curtailing the deduction costs the Treasury Department would raise an estimated $131 billion a year and it would also cut the size of eligible mortgages up to $500,000. This is not good for real estate agents but hopefully the NAR will stand up against these new proposals.

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