As REALTORS®, you know there are many advantages to owning a home. One of the biggest benefits comes every April 15, when millions of homeowners deduct the interest on their mortgages. According to tax research firm CCH, the average homeowner deducts more than $10,000 in mortgage interest. For a taxpayer in the 25% tax bracket, that results in a tax savings of $2,500 on the homeowner’s annual tax return.
Now, in this time of tight budgets across the nation, there are serious efforts at the federal level to scale back or eliminate the mortgage interest deduction (“MID”) as we have known it for the past 25 years. A deficit-reduction commission created by President Obama has recommended reducing or eliminating tax breaks claimed by millions of middle-income Americans. U.S. Congressman Paul Ryan, Republican chairman of the House Budget Committee, unveiled a deficit-reduction plan in April that calls for wiping out special interest tax benefits, although it doesn’t specify which ones. Even a bipartisan debt-reduction task force is targeting popular tax breaks.
HAR surveyed members in order to gauge support for maintaining the current MID, and results indicate overwhelming support for maintaining the current deduction. Over 4,500 HAR members responded to the survey, with 78% supporting the current MID and only 22% supporting a reduction of the current MID.
NAR opposes any changes that would limit or undermine current law, and has issued a Call for Action regarding H. Res. 25, a resolution currently before the U.S. House of Representatives. H. Res. 25 expresses the sense of the Congress that the current Federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted. H. Res. 25 was authored by Rep. Gary Miller (R-CA), and as of April 28, 2011 there are 91 co-sponsors. In response to our member survey results, we are asking our Greater Houston Members of Congress to co-sponsor H. Res. 25.
From the Houston area, Representatives Al Green, Gene Green, Sheila Jackson Lee and Ron Paul have agreed to co-sponsor. Four other members of Congress from Texas, Reps. Michael Conaway, a CPA from Midland, Ruben Hinojosa of Mercedes, Joe Barton of Ennis, and Kay Granger of Fort Worth, are also co-sponsors of the bipartisan resolution.
If your member of Congress is not listed above, please contact him or her and ask for their support to preserve and protect the MID. You can find out who you member of Congress is via HAR.com’s Elected Officials Finder, available at http://www.har.com/ElectedOfficials/default.cfm. Once you have identified your member of Congress, please visit NAR’s REALTOR® Action Center at http://www.realtoractioncenter.com/realtor-party/act/calls-for-action.html for a draft letter to Congress in support of the mortgage interest deduction. The REALTOR® Action Center can also help you find information and updates regarding other matters before Congress and federal regulators. Now more than ever, it is critical for REALTORS® to come together and speak with one voice about the stability a sound and dynamic real estate market brings to our communities.