Mortgage Interest Deduction – At Risk?

Written by Anita Bates
August 25, 2011 3:07 pm

In our Spring issue (Vol. 2 – 2011) we commented on how important the Mortgage Interest Deduction (MID) is to American families.  According to the National Association of Realtors, 91% of homeowners who claim the deduction make less than $200,000 per year, making this tax break one of the most significant benefits of home ownership.

Unfortunately, the current national economic climate may put this valuable tool at risk. 

The Budget Control Act of 2011 (Debt Ceiling Agreement) signed into law on August 2, 2011, provides for creation of a “Super Committee” comprised of 6 members of the Senate and 6 members of the House of Representatives, with each of the political parties represented equally.  This “Super Committee” is charged with identifying $1.5 Trillion in deficit reductions to be achieved within the next 10 years.  The target can be achieved either through revenue increases or actual spending cuts   These must be identified no later than December, 2011, in order to avoid automatic across the board spending cuts that are penalties for failure to meet the time lines specified in the Act.

Even though, as passed, the Budget Control Act of 2011 has no direct impact on real estate tax rules or spending provisions, the rules concerning mortgage interest deduction may be at risk for substantial change as the “Super Committee” looks for ways to increase income.  Estimates say that the “cost” of the MID is from $25 to $80 billion per year in lost tax revenues, making the elimination or modification of the MID a very tempting target.

While curbing or eliminating the mortgage tax break has been talked about for years, it is now on the table as never before, so don’t be surprised if the MID is included in the recommendations for budget cuts and revenue increases that will be unveiled in the coming months.

Announcing!!!!

Written by Anita Bates
3:04 pm

I am pleased to announce that Governor Parnell has appointed me to the Alaska Real Estate Commission. 

The Alaska Real Estate Commission (AREC) is a board that regulates and controls licensing issues for Alaska’s real estate industry.  The Commission also manages the recovery fund established for the benefit of consumers who have been monetarily damaged in a real estate transaction.

In other words, it is the regulatory entity for real estate and is charged with ensuring that the general public is protected from unprofessional and unethical acts on the part of real estate licensees.  In addition, the Board enacts regulations to assure that real estate licensees know their duties and responsibilities to consumers in a real estate transaction

My current term extends through March of 2015, and I have the opportunity to reapply for another 4 years

Make no mistake, though.  This is not a paid position and I will still need to list and sell homes to make a living. 

So…. If you or any of your friends, family or acquaintances are interested in real estate, please feel free to give them my contact information. I’d appreciate your endorsement!

Thank you!

Anita Bates