While recent headlines are focused on escalating tensions in the Korean peninsula and recent stock market records, some real estate industry groups and economists are zeroed in on Congress' proposed reforms to the personal income tax. The pending legislation essentially calls for the elimination of all tax write-offs, including items like mortgage interest. This would be offset by a doubling of the standard deduction.
Opposition to the proposal has come from real estate agents, home builders and mortgage lenders who state that the elimination of such tax benefits would create a disincentive for home buying. The National Association of Realtors has stated that "middle-income homeowners could be worse off under proposals that limit tax incentives for homeownership".
Should the standard deduction increase, most taxpayers that itemize now would no longer need to do so which could make the benefits of owning a home or giving to charities less impactful when calculating tax liability. Proponents of the bill say the elimination of various write-offs could help close tax loopholes that plague the current system.
Today, conforming no-point 30-year fixed mortgage rates averaging 4 percent while 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.