Tax reform is important but should not erase the tax benefits of homeownership. The kind of tax reform being considered in Washington, D.C. threatens to do serious damage or even wipe out the tax benefits of owning a home for most American families.
What’s in play:
Proposal: President-elect Donald Trump and congressional leaders have indicated that tax reform will be a priority in the new Congress starting this month. The National Association of REALTORS® and the WRA will keep you updated on the actual tax reform proposal as it works its way through Congress.
Background:
- Proponents of tax reform pledge to protect the Mortgage Interest Deduction (MID) by retaining it as one of just two itemized deductions that would not be repealed. The other itemized deduction is charitable contributions.
- Simplification of the tax code would eliminate the deduction for state and local taxes paid, including property taxes.
- The standard deduction would be double or tripled, greatly reducing the number of taxpayers claiming the deduction for the MID.
- These two changes would largely erase the tax benefit of homeownership. Buying a home would offer little more tax benefit than renting.