December, 2012:

Assault on the Mortgage Interest Deduction

The big news story this month has been  the perceived “Assault on the Mortgage Interest Deduction” …  It is clear that Americans overwhelmingly oppose any action by Congress that would serve to reduce or (God forbid) eliminate the mortgage interest deduction, which has remained sacrosanct since its inception in 1913.  But as Congress and the White House wrestle with looming deficit reduction challenges, nothing seems safe.

Housing was the leading victim as the overall economy began to falter seven years ago, and it therefore only stands to reason that housing can help lead this economy out of the doldrums. Any tax code change that hinders growth in real estate will serve to hinder growth throughout our entire economy.

The elimination of the mortgage interest deduction would unquestionably weaken demand which would in turn result in lower real estate values. That is to say nothing of the negative impact on millions of American taxpayers with home loans today. Consider that even a modest-sized home loan could result in a $10,000 annual tax deduction for the homeowner.  The tax impact of the elimination of the mortgage interest deduction would be devastating.  Email, write or phone Congress to let them know what you think!

Ed Smith is the the president of RE/MAX Coastal Properties. With 25 years in real estate sales, Ed serves as President-Elect of Emerald Coast Association of Realtors and a Director at Florida Realtor. Ed and wife Terri are ranked among the top RE/MAX teams in Florida, year after year.