Mortgage Deduction Possibility Causes Uncertainty

first_img Servicers Navigate the Post-Pandemic World 2 days ago Previous: The Future of PMI Next: Disclosing the Details August 23, 2017 1,320 Views Servicers Navigate the Post-Pandemic World 2 days ago About Author: Brianna Gilpin Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Share Save In December 2016, then incoming Treasury Secretary Steve Mnuchin pronounced that the Trump Administration’s No. 1 priority would be tax reform—boldly stating it would be the “largest tax change since Reagan.” However, with that change could come significant adjustments to the mortgage interest deduction, something that stirs mixed emotions across the country.In a working paper series, the National Bureau of Economic Research (NBER) found that the mortgage deduction had a no effect on homeownership—even in the long run, but rather had sizable impact on housing demand, causing buyers to purchase larger and more expensive homes. The largest effect was on household financial decisions, including increased debt.In an interview with CNBC, Doug Yearley, CEO of Toll Brothers, a fortune 500 homebuilder, said the change would discourage homeownership as a whole and, while talk in Washington, D.C., has been about modifying the deduction for the last 10 years, he doesn’t see it gaining any traction. However, Ten-X EVP Rick Sharga told MReport that he believes the change could happen—likely only to the $1 million cap.“Based on what we’ve heard so far from the Trump Administration and Capitol Hill, it seems likely that the mortgage interest tax deduction will stay intact; but proposed tax reforms which raise the personal tax deduction to $25,000 for joint filers may discourage taxpayers from itemizing their taxes and taking advantage of the mortgage deduction,” Sharga said.This could actually have a greater impact on the housing market than modifying the mortgage deduction by lowering the cap. Sharga said, “Consumers who are weighing the pros and cons of homeownership will no longer have the financial incentive to buy a home.”To see the full NBER working paper series, click here. Related Articles The Best Markets For Residential Property Investors 2 days ago Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation’s leading diversified media and information services companies. To contact Gilpin, email [email protected] in Daily Dose, Featured, Government, News  Print This Postcenter_img Subscribe Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Home / Daily Dose / Mortgage Deduction Possibility Causes Uncertainty Mortgage deduction 2017-08-23 Brianna Gilpin The Week Ahead: Nearing the Forbearance Exit 2 days ago Tagged with: Mortgage deduction Demand Propels Home Prices Upward 2 days ago Mortgage Deduction Possibility Causes Uncertainty The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Sign up for DS News Daily last_img

Leave a Reply

Your email address will not be published. Required fields are marked *