Q: I recently read where the federal government may be looking to reduce or someday even eliminate the mortgage tax deduction. What’s your take on this? If this ever happens, what would it do to homeowners and the housing market? — Amy M., Las Vegas
A: To me, any such proposal to reduce the tax deduction homeowners currently receive for paying interest on their home mortgage would be a terrible idea.
With our housing market here in Southern Nevada still bouncing along the bottom and trying to right itself, this idea couldn’t come at a worse time.
This idea attracted increased attention back in February, after it turned up in a federal budget proposal for the 2011 fiscal year.
At that time, the National Association of Realtors sent a formal letter to President Barrack Obama explaining why Realtors adamantly oppose any change in the mortgage interest deduction. NAR leaders pointed out that such a change would “result in further erosion of home prices and home values.”
It also seems obvious to me that it would hurt home sales at a time where the local and national housing market needs all the help it can get.
The Obama Administration’s fiscal year 2011 budget recommended, as did the fiscal year 2010 budget, that the value of the mortgage interest deduction for upper-income taxpayers be limited to the 28 percent tax bracket.
As originally drafted, NAR said the budget proposal would change the mortgage interest deduction by reducing the amount of mortgage deductibility on families earning over $250,000 (adjusted gross income), and on single taxpayers earning over $200,000.
Realtors are opposed to such changes to the mortgage interest deduction and are prepared to use our resources to ensure this does not become law.
As it did in 2009, NAR representatives have already sent letters to members of Congress explaining their position.
Fortunately for homeowners, NAR officials tell me most members of Congress also oppose this proposal.
I know others have floated this idea, too. I read where a recent report from the MacArthur Foundation suggested that the mortgage tax break primarily benefits wealthier households. Some analysts suggest the federal government’s mounting debt could lead lawmakers to eliminate such tax deductions.I suspect we haven’t heard the end of this issue.
It’s not something most people think about on a daily basis. But this is just one example of how Realtors here and nationwide work continually to help homeowners and to protect private property rights.
Since there’s no National Association of Homeowners, Realtors often find themselves representing the interests of homeowners at the local, state and federal government levels.
Rick Shelton is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 20 years. GLVAR has 12,500 members. To ask him a question, e-mail him at firstname.lastname@example.org. For more information, visit lasvegasrealtor.com. Questions may be edited for space and clarity.