A proposal to constrain or eliminate the mortgage interest deduction for second homes would affect only a small percentage of U.S. taxpayers, but would dent the wallets of more than 40 percent of the members of the Senate Finance and House Ways and Means committees, Bloomberg reports.

The committees are preparing to undertake the first rewrite of the U.S. tax code since 1986, and the mortgage interest deduction is one of many tax breaks that could be cut or eliminated in the quest to tackle the nation’s growing debt.

Rep. Tom Reed, R-N.Y., tells Bloomberg that while he’s claiming the mortgage interest deduction on a cottage he inherited from his mother, “It doesn’t sway me from a personal perspective.”

The mortgage interest deduction, Reed said, has been “a good real estate policy for America,” and “is something that if we move away from we should do it very carefully.”

All told, the mortgage interest deduction is expected to cost the government about $72 billion in revenue next year. Eliminating the deduction for second homes could generate about $8 billion in revenue, Bloomberg reports.

The National Association of Realtors opposes any changes to the mortgage interest deduction. Jamie Gregory, NAR’s deputy chief lobbyist, told Bloomberg that second homes make up more than 10 percent of the housing stock in nearly 1 out of 3 U.S. counties. About 5 percent of all U.S. homes are second residences, Bloomberg said, citing figures from the National Association of Home Builders. Source: bloomberg.com.

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