Magnolia TX Mortgage Interest Deduction: To Be Or Not To Be?
Actually, the choice might not be yours much longer. The mortgage-interest deduction may be your favorite tax break, but be aware that it has some impressive enemies. For years the government has allowed homeowners to lower tax bills by deducting interest on Magnolia TX real estate mortgages from their taxable income. Interest on up to $1 million in mortgages on first and second homes is deductible, along with interest on up to $100,000 in home equity debt. As in 2005, however, there is now another movement underway by the presidential fiscal commission to do away with this deduction.
There is a steady stream of research from such places as the London School of Economics and the Brookings Institution arguing that the deduction doesn’t boost homeownership, but instead provides incentives for wealthier Americans to buy big houses and take on more debt. The deduction could certainly be seen as having a high-income tilt: only about one in four Americans includes mortgage interest on taxes. Renters and homeowners without mortgages on Magnolia TX real estate have no interest to deduct, while many lower- and middle-class homeowners opt to take a standard tax deduction and don’t itemize.
Nevertheless, the mortgage-interest tax deduction survives, fortified by strong housing industry support and its presumed popularity with voters. Now, according to a recent Bloomberg survey, a growing number of Americans may be willing to end the mortgage tax deduction –as long as they get something in return. Forty-eight percent of respondents said they were willing to give up all tax deductions, including the home mortgage deduction, in return for lower tax rates for every tax bracket.
Enter the National Association of Home Builders which argues that “this is absolutely the worst time to be considering changes to the mortgage interest tax deduction. Tampering with the deduction would be a major setback for today’s slowly emerging housing recovery. It would disrupt the plans of young households who are gathering their financial resources to purchase a home. And it would impose a substantial tax burden on existing home owners, many of whom continue to stay current with their mortgage payments even as they struggle to make ends meet.” Since legislation regarding this matter is still pending in Congress, the NAHB encourages Americans to take action to save their Magnolia TX real estate interest deduction by urging their U.S. Representative to vote to retain the deduction.
Will Congress do so? That is the question…
Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.
Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling your Magnolia TX home, please call Pam at 281-723-0324 or via email with this convenient contact form.