The folks at JBREC have completed their own tax-reform study:
They say the high-earners who buy a million-dollar house are the losers, but those folks can still deduct the roughly $30,000 per year in mortgage-interest paid on a loan amount of $750,000 (though if they were renting previously they now have to pay property taxes).
Reasons for High-Earners to Buy a House:
- Deduct mortgage interest of $30,000 paid on your $750,000 loan (or higher).
- Secure where you are going to live over the next 5-50 years.
- Build equity with each payment.
- Gamble that the value will go up.
- Make the family happy.
Reasons for High-Earners Not to Buy a House:
- Have landlord pay property taxes, HOA, etc.
- Have landlord fix stuff.
- Stay flexible on where to live.
- Hope prices go down and buy later.
Numbers 1-4 on both lists probably offset each other, so the focus is on #5.