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Are we Going to Lose the Mortgage Interest Deduction?

CAN THE REAL ESTATE INDUSTRY AFFORD TO LOSE THE MORTGAGE INTEREST DEDUCTION?

President's Plan May Cut The Mortgage Interest Deduction

I just received this release from the NJAR Week in Review. There is already talk of bumping the tax rate up to 39% for people in this income bracket, and now they want to take away one of the only deductions that a W2/Salaried person has??? How is this fair? I know for some 250k is a huge number... But in certain areas of the country it is a respectable, but hardly "Rich People Money" Income.For example, if you make $250,000 in income and you fall into the new 39% tax bracket you will be paying $97,500 in Federal Taxes and your house would not be something that can be written off?

This is something we should all be screaming about. It effects our livelihoods. The goal is to improve the housing market to help the economy grow: This proposal is certainly NOT going to help the housing market in any way.

Here is the news release I received earlier:

The NATIONAL ASSOCIATION OF REALTORS^®(NAR) and NJAR^® are opposed to the federal budget proposal that would reduce the mortgage interest deduction (MID) for thousands of families. As currently drafted, the plan changes the MID by reducing the amount of mortgage detuctability for families earning over $250,000. According to NAR's analysis, changing the MID will not only negatively impact the 2 percent of families who own homes targeted by the proposal, but also will impact home prices and values across the board. NJAR^®Executive Vice President Jarrod Grasso, RCE said in a statement, "In a high cost state like ours, reducing the amount of mortgage interest a family can deduct from their taxes will have a devastating impact on housing recovery efforts and limit many people's ability to achieve the dream of homeownership."

Read NJAR®'s full press release. View more information on NAR's plan of action and read NAR's press release.

There is a reason for RPAC! We need to fight this as an industry.

Rob

Robert Rauf

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Posted by Robert Rauf on 02/27/2009 04:40 PM

Comments (9)

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9 Comments on Are we Going to Lose the Mortgage Interest Deduction?

FEB

This is a scary one folks, Our industry can not afford another curve ball.

250K....I must admit that is a bit more than I make...Those rich people!

I think it won't affect the real estate market all that much. It might hurt the mortgage industry more as many of these folks may just pay off their mortgage if there's no deduction.

But Gary, it is just a start..... There is only so much blood that you can get from a stone. In certain areas of the country that is not a Huge income, and in some it is "Dynasty Money" It is far from Rich. It is also the group that is more Apt to be buying Vacation homes.... Why would they now with the potential of losing the tax deduction?

Gabe, Stuart has a lot of 2nd home Folks, doesnt it? What do you think will happen to the Second home market if the tax advantage of owning a vacation home goes away?

And people that make $250k do not have the cash to just pay off a mortgage

Interesting. I predicted the same thing on 10/25/08.

It was inevitable.

I just don't see the mortgage interest deduction going away. I would be shocked! But then again I was shocked with the stimulus and bailout packages with the staggering dollar levels.

FEB

Lenn, thanks for stopping by... I hope we dont see this happen. The idea is to help the Real Estate world, not hurt it!

Gary, I hope we dont see it happen, It may be tossed out there knowing it is something they will have to bend on. Time will tell.

MAR

Robert , people who make $250,000 to $500,000 in high cost areas make "good" money , but generally have the hugh expenses to go with them ! Housing costs , car costs , college costs , child care costs ,etc... & of course you make to much to get any "special" breaks ! Like the song says -Tax the rich feed the poor 'til there is no rich no more ! Keepin' it Green !

MAR

Oy Oy Oy Oy OY is about all I can say to that one. I could go on a whole diatribe here, but I will refrain. Needless to say, its just not fair. Tax the hard workers to support the lazy. NOT FAIR! And as an investor, I want all of my mortgage interest deductions. That is a majoe portion of why I bought the houses!

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