Information was released yesterday in an article by Alan J. Heavens, who writes for RISMedia (real estate information systems), regarding our government's latest idea to help reduce the national debt by removing one of the best parts of owning your own home: the income tax home owner's deduction. It is a scaled down version that would eliminate second homes, mortgages over $500,000.00, and home equity lines. These things have been in place for as long as the income tax has been (1913), and have given both businesses and home owners an incentive to get involved. If removed, a change in the way home ownership is viewed is likely to happen. Some general comments from those in the industry are as follow:
“For a battered housing industry, which is struggling with a 21 percent unemployment rate among construction workers, this is absolutely the worst time to be considering changes,” said National Association of Home Builders President Bob Jones. Diminishing or ending the deduction “would exert further downward pressure on home prices, leaving more homeowners with mortgages larger than the value of their property and fueling even more foreclosures".
Mortgage Bankers Association Chairman Michael D. Berman said that while his group’s members shared in the growing concern about the federal deficit, limiting the use of the mortgage-interest deduction “will have negative repercussions for consumers and home values up and down the housing chain.” Given “the fragile state” of the housing market, Berman said, “now is not the time to be scaling back incentives for homeownership.”
The main message here for home owners is to make sure you keep pace with the latest news in regards to the government's efforts to reduce the debt, and determine how all this might effect your livelihood and future finances. Keep educated about what is going on around you, and you will be in a better position to be flexible and deal with whatever comes next.
Happy hunting...
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