American Society of Home Inspectors Supports Protection of Home Mortgage Interest Rate Deduction
ASHI Weighs in on Risks to HMID among "Fiscal Cliff" Negotiations
• "Fiscal cliff" talks potentially risk billions in homeownership incentives provided by HMID, threatening realty-related economy.
• ASHI joins realty and banking industries to oppose any reduction in value of HMID.
• In 2009, 36.5 million taxpayers benefited from the itemized deduction, claiming an estimated $420.8 billion of home mortgage interest.
DES PLAINES, Ill., (December 11, 2012) -The American Society of Home Inspectors® (ASHI) opposes strategies that would diminish the value of the homeownership incentives provided by the home mortgage interest rate deduction (HMID), that are currently allowed under the U.S. tax code.
"A decrease in the effective value of the HMID to U.S. taxpayers would be the wrong move at thewrong time, with multiple negative impacts across the economy," said Marvin Goldstein, ASHIPresident.
Homebuyers who benefit from the HMID are a large segment of the total consumer marketplace. A recent evaluation prepared by the congressional Joint Committee of Taxation for consideration by the U.S. Senate Committee on Finance found that approximately 36.5 million tax returns filed in 2009 took advantage of the itemized deduction for home mortgage interest, claiming deductions for $420.8 billion of home mortgage interest. This amount is likely to be substantially reduced over the next five years as the result of an unprecedented wave of foreclosures and short sales. It will also adversely affect the millions of homeowners who have recently refinanced to take advantage of low interest rates. The HMID is a motivation to buy and helps to support the real estate market. Removal would adversely affect decisions to buy and put the housing market into a stagnant position.
Home sales and refinancing have multiple economic effects. Homeowners make significant expenditures when purchasing or improving a home. They buy appliances, furniture, home equipment as well as pay thousands of small businesses for home improvements and related transaction expenses. ASHI encourages President Obama as well as the policymakers on Capitol Hill to fully support the current tax treatment of the HMID and to fully consider the unintended consequences that will occur from a focused tax action on homeowners.
"Along with our colleagues throughout the real estate industry, ASHI calls on policy-makers to fully protect and uphold the home mortgage interest rate deduction," said Goldstein. "It is an institutionalized factor in the market and any change to it would have a widespread negative impact on the economy."