It's not like the housing market needs any more headwinds, so here's the government potentially giving us another: The mortgage interest deduction is back in big play in the budget deal. It never exactly came off the table, but the bigger the budget deal, the more likely the mortgage deduction will take a bigger hit. Right now, home loan borrowers can deduct the amount of interest they pay on their mortgages from their taxable income. This goes for principal residences and second homes. The interest deduction is capped at the first million dollars of debt on the home. For home equity loans it's capped at $100,000 in debt. The deduction costs the U.S. Treasury about $100 billion a year. There are proposals now to either reduce the cap to $500,000 and/or to eliminate the deduction on second homes. Eliminating the deduction on second homes would save about $15 billion, and reducing the cap to $500,000 would save another $15 billion, according to economist William Wheaton at MIT. 10.5 percent of existing home sales in June were of homes over $500,000 according to the Mortgage Bankers Association. Then there's the idea from the President' bipartisan commission of turning the interest deduction into a 12 percent credit, limited to $500,000 in mortgage debt, only on primary residences. That could save the Treasury $65 billion. Obviously all this hits the middle class, urban borrowers the hardest because they're the ones with homes in the $500,000 to $1 million range. Realtors, home builders, investors, vacation home owners, even politicians hate these proposals, because they take money out of their pockets and because they provide a strong disincentive to buy a home right now. Then again, others argue that it just fosters over-borrowing, as potential homeowners see the deduction as making the loan less than it really is, which it doesn't. Interesting, in Canada, they don't have a mortgage interest deduction on personal residences, but they do on investment properties; this makes a lot more sense to me, as it is a business expense. It also fosters investment in housing, which is precisely what the U.S. could use more of right now. Of course if the US government defaults on its debt, the housing/mortgage markets will have a lot bigger issues to deal with than the potential loss of a tax deduction; like, say, mortgage rates going through the roof. Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts
Wednesday, August 17, 2011
Mortgage Interest Deduction Big in Budget Play
It's not like the housing market needs any more headwinds, so here's the government potentially giving us another: The mortgage interest deduction is back in big play in the budget deal. It never exactly came off the table, but the bigger the budget deal, the more likely the mortgage deduction will take a bigger hit. Right now, home loan borrowers can deduct the amount of interest they pay on their mortgages from their taxable income. This goes for principal residences and second homes. The interest deduction is capped at the first million dollars of debt on the home. For home equity loans it's capped at $100,000 in debt. The deduction costs the U.S. Treasury about $100 billion a year. There are proposals now to either reduce the cap to $500,000 and/or to eliminate the deduction on second homes. Eliminating the deduction on second homes would save about $15 billion, and reducing the cap to $500,000 would save another $15 billion, according to economist William Wheaton at MIT. 10.5 percent of existing home sales in June were of homes over $500,000 according to the Mortgage Bankers Association. Then there's the idea from the President' bipartisan commission of turning the interest deduction into a 12 percent credit, limited to $500,000 in mortgage debt, only on primary residences. That could save the Treasury $65 billion. Obviously all this hits the middle class, urban borrowers the hardest because they're the ones with homes in the $500,000 to $1 million range. Realtors, home builders, investors, vacation home owners, even politicians hate these proposals, because they take money out of their pockets and because they provide a strong disincentive to buy a home right now. Then again, others argue that it just fosters over-borrowing, as potential homeowners see the deduction as making the loan less than it really is, which it doesn't. Interesting, in Canada, they don't have a mortgage interest deduction on personal residences, but they do on investment properties; this makes a lot more sense to me, as it is a business expense. It also fosters investment in housing, which is precisely what the U.S. could use more of right now. Of course if the US government defaults on its debt, the housing/mortgage markets will have a lot bigger issues to deal with than the potential loss of a tax deduction; like, say, mortgage rates going through the roof. Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
Tuesday, April 26, 2011
Thank Florida!: …even with the budget cut, California...
× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Thursday, April 14, 2011, by Philip Ferrato
? Previous: A TIC That We Can Get Behind
Friday, April 8, 2011
Not Enough Green: Harvey Rose, budget analyst for the...
× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, April 5, 2011, by Sally Kuchar
Friday, April 1, 2011
Arlington County Manager's Proposed FY 2012 Budget: No <b>Real Estate</b> <b>...</b>
ARLINGTON, VA - February 9, 2011 - (RealEstateRama) -- Arlington County Manager Barbara Donnellan today proposed a balanced budget for Fiscal Year (FY) 2012 with no real estate tax rate increase and no restoration of previous service cuts.
Amendment to County Code would allow tax to fund transportation projects Arlington, VA, November 28, 2007 – The Arlington County Board last night voted to amend the Arlington County Code to allow a future additional real estate tax on commercial and industrial properties. Any revenue generated by such a tax would be used exclusively to fund transportation [...]...Arlington County Board Approves Building, Zoning Fee Hikes
Fees to fund faster service and a new customer service center ARLINGTON, VA, September 18, 2007 – The Arlington County Board today approved fee increases for building and zoning permits expected to bring in nearly $7.5 million in new revenue for Fiscal Year 2008. The new fees go into effect October 1, 2007. ...Arlington Residential Real Estate Stabilizes at -1.25%
$40 million gap for FY 2010 budget still forecast ARLINGTON, Va. - December 15, 2008 - (RealEstateRama) – In his monthly budget update to the public and the County Board, Arlington County Manager Ron Carlee today announced that the net change in residential assessments is a decline of 1.25%. ...Arlington County Real Estate Values Better Than Expected
Estimated 2010 budget gap now $35 million ARLINGTON, Va. - December 30, 2008 - (RealEstateRama) – Arlington real estate property values for 2009 performed at a higher-than-expected level, showing a net gain of 0.4%, County officials announced today. Existing properties declined in value 0.06%, but new property added 1.0% to the County’s real estate, resulting in a slight gain. ...Arlington County Increases Assistance for First-time Homebuyers
ARLINGTON, Va. - April 28, 2009 - (RealEstateRama) — The Arlington County Board today approved the first increase since 2003 in purchase assistance for low and moderate income first-time homebuyers, a move designed to make it easier for those who are eligible to buy homes in Arlington....Proposed property tax levies for 2010 increase by average of 3.5 percent statewide
Saint Paul, MN - November 19, 2009 - (RealEstateRama) -- Property tax levies will increase an average of 3.5 percent statewide if proposed local tax levies are adopted later this year, the Minnesota Department of Revenue announced today. This compares to last year’s increase of 5.6 percent and an average increase of 6.9 percent during the past three years....3849 Justice Department Announces Indictment and Six Lawsuits Targeting False Claims for First-time Homebuyer and Earned-income Tax Credits
WASHINGTON, DC - February 9, 2011 - (RealEstateRama) -- The United States has filed six lawsuits in five states to stop tax return preparers from fraudulently claiming the first-time homebuyer tax credit and the earned-income tax credit, the Justice Department announced today. The filings of those civil injunction complaints coincided with the indictment of a Philadelphia man on criminal charges of fraudulently claiming the first-time homebuyer credit. All of these actions are part of the Justice Department’s continuing efforts to halt tax scams involving false claims for tax credits and to prosecute those who fraudulently file tax returns containing those claims.BOMA International Adopts Policy Positions on FIRPTA and Data Access
WASHINGTON, DC - February 9, 2011 - (RealEstateRama) -- The Building Owners and Managers Association (BOMA) International’s Board of Governors recently passed two new policy positions in response to important, emerging issues. Foreign Investment in Real Property Tax Act (FIRPTA) Policy Position: BOMA International supports amending, if not the outright repeal of, FIRPTA to increase the amount of foreign capital invested in the U.S. commercial real estate marketSenate Passes Mandate Relief Legislation
New York, NY - February 8, 2011 - (RealEstateRama) -- The New York State Senate today passed three mandate relief bills that would give local governments more authority and flexibility and help save taxpayer dollars. “As the Senate works to enact a property tax cap, it’s important that we also pass mandate relief measures to give municipalities the ability to allocate resources on community priorities, rather than to address state mandates that may not be needed,” Senate Majority Leader Dean Skelos said. “The bills we passed today are simple, common sense legislation to save money.Mayor Says Legislative Action Could Increase Local Property Taxes Or Lead To Major Cuts
February 3, 2011 - (RealEstateRama) -- Mayor Chris Beutler today said cities are willing to do their part to help the State solve its budget crisis. But he called on the State Legislature to reconsider proposals that could force cities to raise property taxes and make major service cuts. He said the State, through a combination of actions and inactions, is in danger of creating a "destructively adverse" financial situation for cities and cited three areas of concernSenate Passes Property Tax Cap Legislation
New York, NY - February 1, 2011 - (RealEstateRama) -- The New York State Senate today passed property tax relief legislation (S.2706) that would place a cap on the growth of school property taxes at two percent or the Consumer Price Index (CPI), whichever is less. If enacted, New York would become the 44th state to cap local property taxes. In addition, the Senate approved two measures related to providing mandate relief to school districts and local governments.
Full article: Arlington County Manager’s Proposed FY 2012 Budget: No Real Estate Tax Rate Increase, No Service Cuts Restored ...
Arlington Lays Groundwork for New Commercial Real Estate TaxAmendment to County Code would allow tax to fund transportation projects Arlington, VA, November 28, 2007 – The Arlington County Board last night voted to amend the Arlington County Code to allow a future additional real estate tax on commercial and industrial properties. Any revenue generated by such a tax would be used exclusively to fund transportation [...]...Arlington County Board Approves Building, Zoning Fee Hikes
Fees to fund faster service and a new customer service center ARLINGTON, VA, September 18, 2007 – The Arlington County Board today approved fee increases for building and zoning permits expected to bring in nearly $7.5 million in new revenue for Fiscal Year 2008. The new fees go into effect October 1, 2007. ...Arlington Residential Real Estate Stabilizes at -1.25%
$40 million gap for FY 2010 budget still forecast ARLINGTON, Va. - December 15, 2008 - (RealEstateRama) – In his monthly budget update to the public and the County Board, Arlington County Manager Ron Carlee today announced that the net change in residential assessments is a decline of 1.25%. ...Arlington County Real Estate Values Better Than Expected
Estimated 2010 budget gap now $35 million ARLINGTON, Va. - December 30, 2008 - (RealEstateRama) – Arlington real estate property values for 2009 performed at a higher-than-expected level, showing a net gain of 0.4%, County officials announced today. Existing properties declined in value 0.06%, but new property added 1.0% to the County’s real estate, resulting in a slight gain. ...Arlington County Increases Assistance for First-time Homebuyers
ARLINGTON, Va. - April 28, 2009 - (RealEstateRama) — The Arlington County Board today approved the first increase since 2003 in purchase assistance for low and moderate income first-time homebuyers, a move designed to make it easier for those who are eligible to buy homes in Arlington....Proposed property tax levies for 2010 increase by average of 3.5 percent statewide
Saint Paul, MN - November 19, 2009 - (RealEstateRama) -- Property tax levies will increase an average of 3.5 percent statewide if proposed local tax levies are adopted later this year, the Minnesota Department of Revenue announced today. This compares to last year’s increase of 5.6 percent and an average increase of 6.9 percent during the past three years....3849 Justice Department Announces Indictment and Six Lawsuits Targeting False Claims for First-time Homebuyer and Earned-income Tax Credits
WASHINGTON, DC - February 9, 2011 - (RealEstateRama) -- The United States has filed six lawsuits in five states to stop tax return preparers from fraudulently claiming the first-time homebuyer tax credit and the earned-income tax credit, the Justice Department announced today. The filings of those civil injunction complaints coincided with the indictment of a Philadelphia man on criminal charges of fraudulently claiming the first-time homebuyer credit. All of these actions are part of the Justice Department’s continuing efforts to halt tax scams involving false claims for tax credits and to prosecute those who fraudulently file tax returns containing those claims.BOMA International Adopts Policy Positions on FIRPTA and Data Access
WASHINGTON, DC - February 9, 2011 - (RealEstateRama) -- The Building Owners and Managers Association (BOMA) International’s Board of Governors recently passed two new policy positions in response to important, emerging issues. Foreign Investment in Real Property Tax Act (FIRPTA) Policy Position: BOMA International supports amending, if not the outright repeal of, FIRPTA to increase the amount of foreign capital invested in the U.S. commercial real estate marketSenate Passes Mandate Relief Legislation
New York, NY - February 8, 2011 - (RealEstateRama) -- The New York State Senate today passed three mandate relief bills that would give local governments more authority and flexibility and help save taxpayer dollars. “As the Senate works to enact a property tax cap, it’s important that we also pass mandate relief measures to give municipalities the ability to allocate resources on community priorities, rather than to address state mandates that may not be needed,” Senate Majority Leader Dean Skelos said. “The bills we passed today are simple, common sense legislation to save money.Mayor Says Legislative Action Could Increase Local Property Taxes Or Lead To Major Cuts
February 3, 2011 - (RealEstateRama) -- Mayor Chris Beutler today said cities are willing to do their part to help the State solve its budget crisis. But he called on the State Legislature to reconsider proposals that could force cities to raise property taxes and make major service cuts. He said the State, through a combination of actions and inactions, is in danger of creating a "destructively adverse" financial situation for cities and cited three areas of concernSenate Passes Property Tax Cap Legislation
New York, NY - February 1, 2011 - (RealEstateRama) -- The New York State Senate today passed property tax relief legislation (S.2706) that would place a cap on the growth of school property taxes at two percent or the Consumer Price Index (CPI), whichever is less. If enacted, New York would become the 44th state to cap local property taxes. In addition, the Senate approved two measures related to providing mandate relief to school districts and local governments.
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