Mortgage-interest deduction on the table as fiscal cliff draws near
With the so-called fiscal cliff on the horizon, lawmakers are considering a number of revisions to the mortgage interest tax deduction, the largest housing-related subsidy in the U.S. tax code, CNBC reported.
Among the propositions on the table: capping the deduction at $500,000, capping it at $250,000, limiting the use of the deduction for taxpayers earning over $250,000, or eliminating it entirely.
Observers tell CNBC that the talk of changing the deduction is killing the housing market’s recovery.
“It’s chilling the market,” Jerry Howard, CEO of the National Association of Home Builders, told CNBC. “Whenever there is uncertainty surrounding the value of an American home, why would you expect people to go out and buy a home? Or, just as much to the point, when there’s uncertainty about the value of a home why would someone put their house on the market to sell it?” [CNBC] –Guelda Voien