OpinionMarkets & Economy

Why you should fear the attack on the mortgage interest deduction

  • The elimination of the mortgage interest deduction will remove a valuable motivation for homeownership.

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Make no mistake, the 100-plus-year-old mortgage interest deduction (MID) is in play, and the odds are good that it will be a shadow of its former self should the proposed tax reform framework become law. Once gutted, its long-term prognosis will be dim. The administration’s tax reform framework and the rough outline proposed by Republican Members of Congress pay lip service to retain the deduction for mortgage interest, but they also nearly double the standard deduction that both renters and homeowners can take, from the current $6,350 for individuals and $12,700 for married couples. That leaves only about the wealthiest 5 percent of homeowners with an incentive to itemize deductions and utilize the MID, according to the National Association of Realtors. This cynical version of a Washington shell game benefits the wealthiest of homeowners, for whom the MID means little -- and eliminates a significant incentive for homeownership for middle and lower income and first-time buye...