<p>I have been watching the debate about doing away with the mortage interest tax credit with great interest. I am concerned about the impact it will have on my household. What do you think the chances are that the credit will be done away with?</p>
<p>I am unsure of what you mean by “mortgage interest tax credit”. Currently, and for a long time it is possible to deduct the interest component made on mortgage payments on a house that is your primary residence from gross income when calculating your taxable income, assuming you itemize rather than taking the standard deduction. </p>
<p>I do not think that anyone considers this provision in the tax laws a “loophole” that only benefits the very wealthy so I think it is very unlikely that this deduction will be disallowed in the future as a result of any deal on the budget impasse.</p>
<p>It has been discussed for a long time but no action has been taken.</p>
<p>I’d guess that those with mortgages would be grandfathered in.</p>
<p>I believe that what they are discussing at this point is the second home and second mortgage or credit lines that go up to $1 million. So far do not seem to have gone as far as all mortgages. But I may be mistaken. Not following it minute by minute.</p>
<p>unfortunately, it is on the table for all of us. The amount of change, and whether or not it would be for all, or the top two tax brackets is also being thrown around. The idea it may change as a whole is quite concerning to me.</p>
<p>I wish I knew the specifics of what the “gang of six” had in their recommendations. All I can find is that mortgage interest tax credit reform is part of it, but no specifics.</p>
<p>Banks will never allow it to happen.</p>
<p>For accuracy: it’s mortgage interest tax deduction. There is no credit to my knowledge.</p>
<p>Sorry BC, my error. You know what I meant!</p>
<p>This is certainly weighing in the home purchase decision for potential home buyers.</p>
<p>It could also cause further decrease in home value, less equity available, and if they stop equity loan tax deductions, could cause problems. All of those have been discussed. I think the known is the hard part. For all of this.</p>
<p>With the housing market in the baby steps of stability I really doubt that the tax deduction would be taken away for primary residences. Line of credit…maybe, second and investment homes…perhaps. I don’t see this going away for primary mortgages.</p>
<p>I hope you are right, blueiguana.</p>
<p>At first I thought this would not affect me because when the kids are done with school, we plan to move to a smaller house. On the other hand, if the deduction goes away will I have a reduced # of buyers since they may be reluctant to move up without the tax benefit? And the same for their buyers, etc…</p>
<p>It’s waaayyy too close to a national election. No one, not democrat, republican, tea party, libertarian, independent, or otherwise wants to take a tax deduction from a family in middle American making under $75K/year. They want to hit businesses and families making over $200k/year. You can’t touch primary mortgage interest deduction and not hit middle America. I’m not saying it won’t happen…I’m saying I think it is very unlikely right now.</p>
<p>I’m all for getting rid of the deduction and just lowering the tax rates.</p>
<p>Last time I’ve read, they still allow mortgage deduction upto $500K on your primary home. I don’t think it will completely goes away.
I’m also ok with it completely goes away and lower the tax rate.</p>
<p>It might not happen in the immediate future but for a potential home buyer, it doesn’t matter that much whether this happens in the next few months or a few years. You’ll be stuck with a mortgage without deduction and your house value will decline.</p>
<p>The mortgage interest tax deduction is not a significant contributor to home value.</p>
<p>It artificially inflates home values and makes it harder for first-time homebuyers.</p>