Thursday, October 13, 2005

Goodbye to the Mortgage Interest Deduction?

The big buzz today from the real estate world comes from President Bush's tax reform panel, who seem to be seriously considering the roll back or elimination of two popular tax breaks -- home mortgage interest rate deductions and employer-paid health insurance.

Currently, a married couple filing jointly can deduct interest on up to $1 million in mortgage debt.

From In a meeting Tuesday, the panel agreed to recommend lowering that limit, perhaps to the maximum mortgage that can be guaranteed by the Federal Housing Administration.

The FHA limit varies by region, but in the Bay Area and most of coastal California is $312,895.

Considering that the median price of a home in Alameda county is now $586,000, it looks like this proposed change in the tax code would hit Californians pretty hard.

For further reading, check out:

Blanche Evans with Realty Times.

Buzz Machine

NY Times

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