Quote:
Originally Posted by opendoor
That sort of already exists. Only the interest on the first $1 million is deductible.
Though it really shouldn't exist at all. That kind of stuff mostly gets built into home prices so there's no real savings for the consumer. If a person saves $3K a year on taxes from the deduction they're just going to be able to spend that much more a year on the mortgage. The government effectively subsidizes the real estate industry to the tune of $100 billion a year.
It sounds like it's actually on the table though. There have been some proposals that would drastically limit it or eliminate it all together in order to deal with the fiscal cliff. We'll see if it actually happens.
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The problem with the mortgage deduction is that if you eliminated it you would likely crash the realestate market again as vaues would drop as borrowing costs increased so you would have to unwind the deduction slowly over a long period say 10 to 20 years