Home mortgage tax deduction
- Thread starter ruffryder
- Start date
What I have heard they are discussing is:
- No mortgage deduction on loans over $500k
- No mortgage deduction on 2nd homes, etc.
- Possible indexing of the deductable loan amount for expensive housing areas
Couple of questions that I have -
- How will this be indexed in the future? I would imagine at some point inflation will drive up all home prices to be $500k
- Does a 2nd mortgage rule apply only to a physical 2nd home, or can I still deduct a HELOC on my first house? (you see where I am going with this - you could get a HELOC on your first home to buy a cabin and still write off the interest....)
As for the fairness and whether or not they should do it - I don't know. I have deducted interest every year, but I think I would still own a house even if I did not get the tax break.
- No mortgage deduction on loans over $500k
- No mortgage deduction on 2nd homes, etc.
- Possible indexing of the deductable loan amount for expensive housing areas
Couple of questions that I have -
- How will this be indexed in the future? I would imagine at some point inflation will drive up all home prices to be $500k
- Does a 2nd mortgage rule apply only to a physical 2nd home, or can I still deduct a HELOC on my first house? (you see where I am going with this - you could get a HELOC on your first home to buy a cabin and still write off the interest....)
As for the fairness and whether or not they should do it - I don't know. I have deducted interest every year, but I think I would still own a house even if I did not get the tax break.
Yes....right now homes over 1 million don't get the deduction. They want to drop it to $500K.
I understand the mortgage deduction originated to encourage home ownership and all the jobs that go with building more houses... and the increased tax revenues that come with all those additional jobs. That's part of the problem now....not many new houses being built.
As a side note....I have been in a 18 month battle with the IRS and they are so far refusing to allow me to deduct even my mortgage interest for a couple of years. I have to pay a lawyer to get the IRS to follow their own laws....I am not bitter though.
I understand the mortgage deduction originated to encourage home ownership and all the jobs that go with building more houses... and the increased tax revenues that come with all those additional jobs. That's part of the problem now....not many new houses being built.
As a side note....I have been in a 18 month battle with the IRS and they are so far refusing to allow me to deduct even my mortgage interest for a couple of years. I have to pay a lawyer to get the IRS to follow their own laws....I am not bitter though.
An argument to the increase in home ownership is that the mortgage deduction does not change the rent vs buy decision by much, but does allow for a person to increase the size of the house they buy. Not sure about that. In my own life, the mortgage deduction plays little in the decision to rent vs buy. I rent, gonna buy someday, but when I look at the financial decision, the mortgage deduction plays little into the analysis.
IMO, if the margin between getting a house vs renting is writing off the mortgage interest on your taxes, that is way too close and you should probably rent.
I think they should just get rid of the whole thing and remove all subsidies for housing.
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subsidies
That's where the problem began,, the tax revenue WAS enough in this country until greed took over,, and lobbyists and, and, and, and.. What ever happened to simple interest loans and saving money for a down payment?? Reign in the unions and the entitlements get this country producing better products than what are coming out of china. Think that would CHANGE the economy??????? KICK most of the lobbyists out of ALL the houses in every state, bunch of whiners anyway! I'm done,,,, for now....
That's where the problem began,, the tax revenue WAS enough in this country until greed took over,, and lobbyists and, and, and, and.. What ever happened to simple interest loans and saving money for a down payment?? Reign in the unions and the entitlements get this country producing better products than what are coming out of china. Think that would CHANGE the economy??????? KICK most of the lobbyists out of ALL the houses in every state, bunch of whiners anyway! I'm done,,,, for now....
Whoever you rent from is likely able to write off interest....so if they could not, would that not increase rent also?....so is rent being subsidized too?
With interest rates at record lows it may not be as appealing as when they are double or triple the current rate as they have often been in the past.
good point. I would argue that rent is priced at the most they can get away with. If demand for rentals increases, then the price will increase, regardless of the costs incurred by the landlord.
excellent point
My tax policy would allow you to choose between a deduction against your federal income taxes of either your home mortgage interest or college tuition at both the undergraduate and graduate level.
One or the other, not both.
There would be no income and/or asset restrictions of any kind.
One or the other, not both.
There would be no income and/or asset restrictions of any kind.
one is federal and the other is state, correct?
Why not just tax all business on gross while your at it!
Just another way of raising taxes by eliminating deductions!
Wasn't that many years ago that ALL interest was tax deductible.
Part of the housing crash could have been avoided if people could have deducted the interest on their 4 wheeler, motor home or snowmobile in stead of taking a second mortgage on their home! Yes they may have lost the toy but at least they would still have the home. As I see it the difference between a subsidy and a deduction is if it effects you personally.
Good gawd liberals are thick!
Just another way of raising taxes by eliminating deductions!
Wasn't that many years ago that ALL interest was tax deductible.
Part of the housing crash could have been avoided if people could have deducted the interest on their 4 wheeler, motor home or snowmobile in stead of taking a second mortgage on their home! Yes they may have lost the toy but at least they would still have the home. As I see it the difference between a subsidy and a deduction is if it effects you personally.
Good gawd liberals are thick!
Let's just tax the "BIG CORPS and THE SUPER RICH" then we won't have any of these problems! What a bunch of crap!
WE DON"T NEED MORE TAXES, WE NEED LESS SPENDING!
WE DON"T NEED MORE TAXES, WE NEED LESS SPENDING!
So reduce everyones govt cheese except for yours?
How about removing a lot of the deductions and also reducing the tax rate?
I have a problem giving my cheese to someone who doesn't deserve it!
If the bottom line doesn't raise more revenue what's the point?
All you are trying to do is hide a tax increase.
There has been little to no discussion on truly cutting spending.
All that has been talked about is limiting /cutting growth.
If the bottom line doesn't raise more revenue what's the point?
All you are trying to do is hide a tax increase.
There has been little to no discussion on truly cutting spending.
All that has been talked about is limiting /cutting growth.
Agreed. I think the politicians are scared that while the American people want the govt to reduce a lot of spending, they don't want to be affected by the cuts.
To balance the budget and start paying down the debt, it is going to hurt... everyone.
D
DOO DAWG
Well-known member
That middle statement of yours is exactly how they do it in this state.....call it a fee.
IRS would rather you own your home so there is something of value to take from you.
Oh and by the way,keeping the money I have earned is not a subsidy!
Me taking your money to pay my rent, food and education is a subsidy!
yes! But I reallly ReeeeeALLy hate property tax.
In this wonderful welfare state my CNC machines are personal property everyone else gets to write of work related expenses but I get to pay tax on them?
On the other hand I get to depriciate them on my taxes! but as far as i know thw depreciation write off is the only part that goes away the tax never does . Kinda like the mortage deduction
sure seems like theres a whole lot of room to simplify the tax code now doesnt it .
Not to get too far off topic....but how about the consumption/national sales tax? Seems as fair as anything as the rich pay more and the poor pay less.
Or a combination of consumption and a much lower income tax.
Schedule the consumption tax for 2-3 years out to encourage consumer spending now. Then lower the income tax when the sales tax kicks in.
Or a combination of consumption and a much lower income tax.
Schedule the consumption tax for 2-3 years out to encourage consumer spending now. Then lower the income tax when the sales tax kicks in.
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