Defending the Mortgage Interest Deduction
In November 2005, the President's Advisory Panel on Tax Reform recommended converting the mortgage interest deduction into a tax credit and significantly reducing the amount of a mortgage that would be eligible to receive tax benefits. These two proposals represent a significant tax increase for homeowners. In addition, the Panel recommended completely eliminating the mortgage interest deduction for second homes and for home equity loans and lines of credit. The deduction for property taxes would also be repealed. While these proposals appeal to some economists, they are very controversial. This proposal would likely cause the value of all housing to fall, but would be particularly unfair in high cost areas.
NAR's position
Housing is the engine that drives the economy, and to even mention reducing the tax benefits of homeownership could endanger property values. Home prices, particularly in high cost areas, could decline 15 percent if recommendations to convert the mortgage interest deduction to a tax credit are implemented.
Read more about NAR's position on the Mortgage Interest Deduction >
News on the Issue,
Transforming the Tax Code: An Examination of the President's Panel on Tax Reform Recommendations
On February 1, 2006, REALTOR® Andy Loftis testified on behalf of NAR at the House Committee on Small Business and Joint Subcommittees on Tax, Finance & Exports and Rural Enterprises, Agriculture and Technology. The subcommittees that held the hearing are not legislative committees and will have no substantive role in crafting any tax legislation at such time as the tax writing committees start reviewing the tax reform proposals.
Read Andy Loftis' full testimony (PDF 35K) >
Federal Tax Reform: Fending off disaster
(January 2006) NAR is ready to fight the assault on critical homeownership deductions.
NAR Launches Ads About the Mortgage Interest Deduction
WASHINGTON (December 5, 2005) -- The NATIONAL ASSOCIATION OF REALTORS® today launched an advertising campaign warning that home values could drop significantly if the recommendations of a federal tax reform panel to drastically reduce the mortgage interest deduction were implemented.
REALTORS® Raise Alarms Over Real Estate Tax Proposal
SAN FRANCISCO (October 31, 2005) - As President Bush's advisory Tax Reform Panel completes its work, the board of directors of the NATIONAL ASSOCIATION OF REALTORS® today formally voted to oppose proposals under consideration by the panel that NAR believes would drive down real estate values, have a devastating effect on the nation's housing economy and negatively impact the nation's economy.
Change to Mortgage Interest Deduction Could Drop Home Prices by 15%, NAR President Warns
SAN FRANCISCO (October 26, 2005) - Home prices, particularly in high cost areas, could decline 15 percent if President Bush's tax reform panel's expected recommendation to convert the mortgage interest deduction (MID) to a tax credit gets implemented, said Al Mansell, president of the NATIONAL ASSOCIATION OF REALTORS®. Speaking at the opening session of the 2005 REALTORS® Conference & Expo here, Mansell said that if the MID were changed, the typical homeowner could lose $20,000 to $30,000 in housing equity.
NAR Letter to the Tax Reform Panel
On October 14, 2005, NAR 2005 president Al Mansell issued a letter to the President's Advisory Panel on Tax Reform. The letter outlined NAR's observations and concerns in response to the panel's discussion of the mortgage interest deduction and other benefits associated with owner-occupied housing.
