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MAKE IT SIMPLE

Streamline tax code, retain deduction, lower rates so more can afford homes

Washington’s leaders might be ready to make it easier for more Americans to realize the dream of home ownership.

Now that America’s 45th president has been sworn into office, all indicators suggest that President Trump is looking to fix a tax code that is outdated, overly complex and too onerous.

Furthermore, it is expected that Congress will take up tax reform in the near future.

While behind the overall idea of tax reform, Realtors are hoping that the government preserves longstanding tax incentives for home ownership and real estate investment, including the mortgage interest deduction and property tax deductions.

The National Association of Realtors has made it clear to lawmakers that it will resist efforts to eliminate or curtail mortgage interest deductions. And the NAR has come out against proposals circulating in Washington for several years that would effectively eliminate the incentive value of the deduction for most homeowners by raising the standard deduction.

RETAIN INDUCEMENTS

Analysts have called proposals to cut most itemized deductions – including for property and other state and local taxes – and doubling or tripling the standard deduction a back-door attack on the mortgage interest deduction.

Why? Because it would eliminate the incentive for most people to itemize.

NAR estimates that only the wealthiest 5 percent of households would continue to itemize under some of the proposed changes, while currently the bulk of households that take advantage of the mortgage interest deduction and property tax deductions are middle class.

This could also adversely affect the younger generations, holding them back from entering the middle class and achieving the dream of home ownership.

CHANGE IS HERE

Whether we are reading opinions in the news each day, listening to our preferred cable news network’s favorite talking heads or debating with friends and colleagues on Facebook about our new president, there is one thing we can all agree on: The real estate industry is in the midst of significant changes.

As tax reform proposals begin to take shape in D.C., it is our responsibility to protect our members’ interests and defend all homeowners.

We hope this new administration will hear us loud and clear.

PRESERVING THE AMERICAN DREAM

NAR also is focused on retaining the federal guarantee in financing. Without the government’s support of Fannie Mae, Freddie Mac and the Federal Housing Administration, there would be almost no capital available for mortgage lending.

Most importantly, the tax code must continue to reflect the values that make our nation so exceptional. If we can improve the home ownership rate, we can open the door to the American dream for more people and create more opportunities for our members and citizens.

In the coming tax reform debate, NAR, along with state and local Realtor associations, will be there to remind legislators, regulators and the Trump administration of the policies that made America great in the first place – putting home ownership in reach of more Americans.

COMMON GROUND

These are projections and thoughts from some of the leading minds from the National Association of Realtors. No matter your political affiliation or your opinions on what is more important regarding tax reform, we must all be on top of tax reform and its societal consequences, such as economic growth and job creation.

When someone has the willingness to simplify the tax law and to broaden the base and lower the tax rate, a very real possibility exists that common ground on tax reform can be found.

When the dust settles one last time, homeowners will still have a roof over their heads.

Justin Porembo is the CEO of Greater Lehigh Valley Realtors (www.greaterlehighvalleyrealtors.com), a not-for-profit trade association representing more than 2,000 Realtors in Carbon, Lehigh and Northampton counties. He can be reached at [email protected]

 

 

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