The Trump tax reform plan has been under intense scrutiny, and who knows what will come of it. But the response from our National Association of Realtors was exactly what we can expect from them for the duration. They entitled their article, “Homeownership in the Crosshairs of Latest Tax Plan”. An excerpt:
The mortgage interest deduction and the state and local tax deduction make homeownership more affordable, while 1031 like-kind exchanges help investors keep inventory on the market and money flowing to local communities.
“Those tax incentives are at risk in the tax plan released today. Current homeowners could very well see their home’s value plummet and their equity evaporate if tax reform nullifies or eliminates the tax incentives they depend upon, while prospective homebuyers will see that dream pushed further out of reach. As it stands, homeowners already pay between 80 and 90 percent of U.S. federal income tax. Without tax incentives for homeownership, those numbers could rise even further. And while we appreciate the Administration’s stated commitment to protecting homeownership, this plan does anything but.”
“Homeowners put their hard-earned money on the line to make an investment in themselves and their communities, and it’s on them to protect that investment. Common sense says owning a home isn’t the same as renting one, and American’s tax code shouldn’t treat those activities the same either.
“Realtors® support tax reform, and it’s encouraging to see leaders in Washington doing their part to get there. We believe tax rates should come down to the degree that sound fiscal policy allows, and simplifying the tax code will help ensure fairness and transparency for individual taxpayers. It’s a goal we share with the authors of this tax plan, but getting there by eliminating the incentives for homeownership is the wrong approach. We look forward to working with leaders in Congress and the administration to reform the tax code, while preserving America’s long-held commitment to homeownership.”
This quote was from our N.A.R. president, a volunteer position that changes every year. I don’t have high expectations of them, but can’t we do better?
To threaten that home values will “plummet” if the M.I.D. is eliminated is a gross fabrication only meant to scare people. The average mortgage amount in America is $168,000 – any big benefit from the mortgage-interest deduction is by wealthy individuals who can qualify for larger mortgages. With our ultra-low interest rates, any actual benefit is limited. Values won’t ‘plummet’ if the M.I.D. goes away.
Let’s also note that if values did plummet, then wouldn’t prospective homebuyers benefit, instead of seeing their “dream pushed further out of reach”??
The real threat is that if the M.I.D. did get phased out, then the NAR lobbyists would be out of a job.