The Fredericksburg Area Association of REALTORS® (FAAR) joins fellow Realtors® and affiliates from across the country in advocating for the protection of homeownership-related tax provisions during the current tax reform debate. Proposals being discussed on Capitol Hill would dilute the Mortgage Interest Deduction and the deduction of state and local property taxes.
The loss of these tax benefits could lead to a real estate market adjustment where homeowners could see a loss of 10% or more in their property values. In addition, taxes would be raised on middle class homeowners at a time when homeowners pay more than 83% of all taxes collected. Pending tax reform plans threaten to wipe out the tax benefits of owning a home for 95% of American families.
Under the current tax law, homeowners are allowed a deduction for mortgage interest paid. The deduction is generally allowed for interest paid on mortgage debt of up to $1 million, and is available for interest on mortgages for a principal residence and one additional residence. The $1 million limitation represents the combined allowable debt on two residences. Mortgage interest on up to $100,000 of debt on home equity loans or lines of credit also qualifies for the deduction.
The United States has a long history of encouraging homeownership in the tax code and any reform must first do no harm to homeowners. Realtors® are supportive of comprehensive tax reform that simplifies the tax code, but not at the expense of middle class families.
The National Association of Realtors®, representing over 1 million Realtors® nationwide, is working closely with the Trump Administration and the U.S. Congress to advocate for comprehensive tax reform that preserves the benefits of homeownership.