As lawmakers continue to quibble over the fiscal cliff issue, one of the items being placed on the chopping block is the mortgage interest tax deduction. If eliminated, the financial impact on real estate in Atlanta and housing markets nationwide could once again devastate the housing economy.
Currently, the home mortgage interest deduction allows taxpayers who own their own homes to reduce their taxable income by the amount of interest paid on loan secured by their principal residence. In order to take advantage of these savings, which can amount to up to $12,000 in savings, the taxpayer must choose to itemize their deductions and meet other requirements.
This deduction is one of the most cherished in the U.S. tax code, but it’s also one of the most expensive since it generally costs the federal government $100 billion per fiscal year. However, while it would save the federal government money, it would most likely dampen interest in Atlanta new home purchases and keep the housing recovery from taking off like it is expected to in 2013.
For more information on this issue and new home mortgages in general, visit the Academy Mortgage website.
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