It’s Back – Eliminating the Home Mortgage Interest Deduction

home mortgage interest deduction

Washington talk is once again directed toward the real estate market. As part of the original Cap & Tax energy bill, a costly energy efficiency inspection was proposed for all home sellers. Also included was that the home mortgage interest deduction would be severely limited, or eliminated, for ‘high income’ homeowners.  Luckily, both these ideas never materialized.

It seems that real estate tax revenue ideas never really die. Just lately in Washington, many policy experts have criticized the home mortgage interest deduction as a regressive budget-buster. Housing Secretary Shaun Donovan recently suggested that it could be fine-tuned. Some possibilities: limiting the break for wealthy taxpayers or for second homes.

If an income limit is placed on the the home mortgage interest deduction, it will only be a matter of time before this income limit is lowered in the push for  further wealth redistribution, until finally the home mortgage interest deduction will just be a found memory.

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