In a letter sent this month NAR 2017 President William E. Brown urged new Treasury Secretary Steven Mnuchin to protect the current tax benefits of home ownership as the Trump Administration seeks to reform the federal income tax system.
Referring to recent media reports where Mnuchin promised to leave “the mortgage interest deduction as is,” the letter explained that certain types of tax reform plans, such as the “Blueprint” put forward by House Republicans last year, also pledge to leave the deduction untouched. However, by nearly doubling the standard deduction while repealing most itemized deductions, “the Blueprint would in fact have the consequences of nullifying not only the MID, but also other tax incentives of owning a home for the great majority of Americans who now are, or who aspire to become, homeowners.”
The letter goes on to explain that this kind of approach to tax reform could harm the incentive effect that makes purchasing a home easier for the first-time homebuyer and also could lead to a drop in the value of all existing homes.
“The overall result could be a disastrous downturn in the quality of many neighborhoods and communities, and especially our most vulnerable ones,” Brown said in the letter.
The letter concludes by asserting that REALTORS® support tax reform, but that in making needed changes, we should “not discard the features of our tax system that make America a homeownership society.”