The Mortgage Interest deduction that’s part of the current IRS Code is one of the key things that make home ownership affordable for most people. It allows homeowners to itemize their deductions and write off the interest they pay on their home loan. For many tax payers the savings can be into the thousands of dollars. There has been some talk in Congress about possibly doing away with or modifying the Mortgage Interest deduction. IRS Field Media Relations Representative, Richard Panick explains the deduction currently allows for a primary and one secondary home.
“Then they may have a place here in lovely Grass Valley they come to on the weekends and they may have another place along the coast in Santa Cruz when they want to go to the water. One of those can be designated as their second home and they can vary back and forth each tax year.”
Panick says there is nothing official in terms of any changes in tax law pertaining to mortgage interest, but there are always proposals before Congress. He explains what can happen.
“Once the law is passed by congress and signed by the president, then the language of the law can designate the effective date of that law so it can be effective on the date of enactment, it can be effective some day in the future, or it can even be made retroactive to a past date.”
Panick suggests anyone with a vested interest in the Home Mortgage deduction should follow the news and contact their elected representatives with concerns. Many Realtor Associations have opposed any changes to the Mortgage deduction which they say could put a damper on home sales at a time when the housing market is already in crisis.