REALTORS Strongly Oppose Mortgage Interest Reduction In New Federal Budget

From the Cleveland Area Board of Realtors (CABOR):

The Cleveland Area Board of Realtors® (CABOR) strongly opposes the proposed cut in the mortgage interest deduction in President Obama's budget that was sent to Congress yesterday.

The administration's budget plan proposes to limit the tax rate at which high-income taxpayers - those whose family income is $250,000 ($200,000 for singles) or more - could take itemized deductions. As proposed, that rate would only be 28%.

"If you are in the 35 percent income tax bracket and you have tax deductions of $10,000, you would be able only to deduct 28 percent of that -- $2,800, in essence a tax hike," said CABOR Chairwoman of the Board, Dianna Hosta-Stickney.

According to Ms. Hosta-Stickney, "such a limitation would impact homeowners and home values because the mortgage interest deduction is the single biggest itemized deduction for most families."

While the proposal applies to the top 2% of wage earners, home prices across the country would fall as home buyers discount the value of the deduction in their purchase offers, setting off a chain reaction that will affect prices on all homes, not just high-end homes.

"At a time when we are working to revitalize the housing market and ignite economic recovery, tinkering with the mortgage interest deduction is a poor decision," said Ms. Hosta-Stickney.