Real Estate: Will Mortgage Interest Write-Offs Be Reduced?
The Congressional Budget Office has come out with a report showing 66 ways to raise money for the federal government. This sounds like dull and boring stuff until you get to Option #7: Reduce the Mortgage Interest Deduction or Replace It with a Tax Credit.
Ugh. You can see where this is going.
“The first alternative would reduce the maximum mortgage eligible for the interest deduction from $1.1 million in 2012 to $500,000 in 2018 by annual decrements of $100,000 each. That change would boost revenues by only $400 million in 2013 but by $41 billion over 10 years. The $500,000 cap would affect more homeowners in later years as incomes increase and housing prices rise.
“The second alternative would replace the deduction with a 15 percent tax credit for interest on mortgages below the declining limits in the first alternative. (In 2005, the President
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