With all the media attention and focus on the fight in Washington to prevent shutting down the government and how to fund Obamacare, the real estate industry has a consumer fight on their hands also. A tax reform package that is being outlined by the chairman of the House Ways and Means Committee, Dave Camp a Republican from Michigan could drastically have far-reaching affects to homeowners.
The efforts by the Republicans is focused on streamlining the tax code and reduce the current tax brackets to just two. The proposal will offer a 25% and 10% for individuals and families and corporate rates would be capped at 25% also. The effect of this change would mean that all current deductions and credits including the tax benefits enjoyed by the real estate industry including the mortgage interest write-off are in danger of being eliminated to counter the loss of revenue from the lower tax rates.
Those specialists in real estate and housing on Capitol Hill say that Camp’s plan could mean some harsh decisions regarding housing write-offs. The real property tax reduction as an example, could be at risk as it’s emphasis is towards homeowners in high-cost and high-tax states and estimated around $30 billion a year in write-offs. Another potential target is the mortgage interest deduction which provides an estimated $70 billion a year in consumer tax benefits.
The partisan fight in Washington has been focused on budgets and the continuing battle over the Obamacare implementation, but be aware of what is going on under the radar and how it could affect most all American homeowners!
Source: Inman News
Steve Lester is a REALTOR living in Allen, Texas.