House Republicans have proposed tax reform that would make the mortgage-interest tax deduction irrelevant for most Americans, according to an article by Ciro Scotti for The Fiscal Times.
The Better Way tax reform would not remove the mortgage interest deduction, but would make it less attractive for the majority of taxpayers to claim.
From the article:
The specific language in the Better Way says: “This Blueprint will preserve a mortgage interest deduction for homeowners. …For those taxpayers who continue to itemize deductions, no existing mortgage will be affected by any changes in the tax code. Similarly, no changes will affect re-financings of existing mortgages. But just as importantly, because of the other provisions included in the new tax system, far fewer taxpayers will choose to itemize deductions, with the vast majority of taxpayers finding they are better off by taking advantage of the larger, simpler standard deduction instead.”
Even with Republicans controlling the House and Senate, the new reform could still be difficult to accomplish, according to the article. And housing experts such as the National Association of Homebuilders, the Mortgage Bankers Association and the National Association of Realtors are responding to what they say is an “indirect threat” to the mortgage-interest deduction and the housing industry, according to the article.
NAR Chief Economist Lawrence Yun even went as far as to say that this new proposal could derail the housing recovery, according to the article.