San Diego, CA (PRWEB) December 01, 2012
The Real Estate Marketing Insider took a look at the options for real estate professionals after it was announced by The Day that Congress will take a close look at, and might cancel, the mortgage interest deduction that saves home owners almost $80 billion per year. REMI recommends that realtors contact their Congressmen to fight for the mortgage interest break, but also take a look at their portfolio in preparation for a tougher housing market.
The “fiscal cliff” looms large at the end of the year, and Congress is busy trying to stave it off by making a deal to balance the budget. President Obama, as well as many other Democrats, are recommending capping all deductions across the board. The high-pressure, high-stakes discussion about deductions includes the mortgage interest deduction, a century-old tax break that saves home owners around $80 billion each year.
The idea behind the mortgage interest deduction is simple: homeowners get a tax break based on interest they pay on their mortgage. It’s designed to encourage home ownership, and is one of the oldest and most popular deductions; but its $80 billion price tag is also one of the priciest.
A popular proposal for the deduction is to cap it at $500,000, meaning that any mortgages on homes above that number would have limited tax-deductibility on their interest. In some states this could be catastrophic: analysts in Connecticut, for example, have said that some taxpayers could lose up to 11 percent of their deductions with this cap, a percentage that amounts to $82 million.
Other real estate experts also say that any real estate deduction cap, whether this steep or not, could be harmful to the recovering market. A cap on the interest deduction would, they say, mean a drop in real estate prices across the board, potentially sending the market back down into the doldrums it’s still struggling to climb out of.
REMI is strongly against any change to the mortgage interest deduction. We recommend that all real estate professionals call their Congressmen and tell them to protect the deduction when talking about taxes in the coming weeks.
REMI’s expert opinion is as follows, “Still, it’s possible that the deduction could be capped, and real estate workers need to be ready to deal with the consequences. Here are some things to keep in mind:
We at REMI are hoping that the mortgage interest deduction is safe, but if it’s not, these are some things real estate professionals can do to make sure their business is.”
The Real Estate Marketing Insider analyzed some changes in the real estate market that could be caused by the capping of the mortgage interest deduction. As part of its money-saving discussions, Congress is considering capping the deduction at $500,000. REMI recommended that real estate professionals urge their Congressmen to protect it, and made some recommendations on how to protect your real estate business from the effects of a deduction cap.
About the Real Estate Marketing Insider: REMI is an online publication that provides real estate professionals with breaking news, trend analysis and marketing tips. REMI is based in La Jolla, CA.