HOME INTEREST RATES SAFE AS A TAX DEDUCTION IN THE FUTURE?

Rep. Barney Frank (D-Mass.) said at a House subcommittee hearing Thursday that the mortgage interest tax deduction would be safe.

Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.

But when President Obama released his 2012 budget, the deduction considered a "sacred cow" to homeowners and many trade groups  an across-the-board 30% cut to itemized deductions for high-income taxpayers.

 Frank, who was later backed by freshman Rep. Michael Grimm (R-N.Y.) said the deduction would be safe.



Frank went on to say that he doesn't think there are enough votes in the House to abolish the deduction and that it will be a corner stone to the future of housing finance Congress is attempting to put together.



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April 02 2011 - Spokane
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Profile picture for the_country_hick
It is very possible the entire tax structure will change. We could even see lower rate with NO deductions at all.

If anyone buys a house only for the tax deduction or needing it to buy they should not buy.
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April 02 2011
Profile picture for Pasadenan
Considering the tax legislation passed December 2010; the issue is certainly a "dead" issue for this year and likely next year too.

And all the discussions have been on a "phase in", and not affecting those below $200k annual income, and providing alternate tax relief for any increase in taxes resulting from not having the deduction anyway!

It is no "sacred cow"; the majority of home buyers in the country get no benefit from such itemization considering the standard deduction is higher, especially with the present low interest rates.

It has always been as subsidy to the lending industry, and a means of increasing the number of transactions that Realtors® get paid for.

As such, the only ones it is really sacred to is "NAR".  And I certainly think that having NAR abolished would be the best thing that could happen for U.S. and world economies and consumers and tax payers everywhere.
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April 02 2011
It would hurt most homeowners to take away the tax deduction, those that vote for it may just lose their seats
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April 02 2011
Profile picture for SteadyState
Those that vote for continuing to support the mortgage interest deduction will also loose their seats. There are still many free market capitalists left in the US - we are all not socialists.
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April 06 2011
 
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