Eliminating the mortgage interest tax deduction….

Is under consideration again.  Eliminating the mortgage interest tax deduction.

This comes under consideration every once in awhile to get home owners warmed up to the idea of giving up one of their few tax deductions.  Our Association of Realtors notified of this newest ‘look’, and  I found the following article in the New York Times.

I find this scary on a few levels.  Despite the argument that countries such as Canada and Australia don’t have a deduction, it is so ingrained in our culture, how do you give it up without sending huge shock waves (and more foreclosures and reduced property values) throughout the system.  To ‘warm’ us up, the $500,000 mortgage limit is floated out there.  In California, that is not a huge mortgage-given our property values.  And, yes, we do take the deduction into consideration when qualifying people for buying a home.  When you may need to spend 40-45 percent of your take home pay for housing, you need the tax break.

I know we’ve got some serious financial problems; is this the way to do it?

Taking Aim at the Mortgage Tax Break-New York Times