President Trump’s proposed tax plan has been met largely with disapproval from the housing industry, with several constituents concerned about a change that would double the standard deduction—and, in effect, invalidate the tax benefits of owning a home.
“For roughly 75 million homeowners across the country, their home is more than just a number,” said National Association of REALTORS® (NAR) President Bill Brown in a statement on the plan. “It represents their ambitions, their nest egg, and the place where memories are made with family and friends. Targeted tax incentives are in place to help people get there. The mortgage interest deduction and the state and local tax deduction make homeownership more affordable, while 1031 like-kind exchanges help investors keep inventory on the market and money flowing to local communities. Those tax incentives are at risk in the plan released [this week].”
The outcome of the changes, should they be enacted, could be devastating to homeownership, according to Brown.
“Concerns regarding the decreased value of the mortgage interest rate deduction with an increase in the standard deduction seem to be nothing more than political rhetoric. Simply put, the deduction presently has far more perceived value than actual value for most Americans, including homeowners. Simplification of the tax code via an increase in the standard deduction is a good thing, and the proposed increase leaves more dollars in the pockets of hard working Americans. It doesn’t diminish the American Dream; it enables more people to reach the American Dream.”