GOP tax bill lowers ceiling on mortgage interest deduction on new homes
The House GOP tax bill set for release Thursday keeps the mortgage-interest deduction for newly purchased homes, but puts a new ceiling on it of $500,000.
The provisions is sure to draw opposition from the housing industry, which has long touted the deduction as a critical component of the U.S. economy that helps people become home owners.
{mosads}It could also draw opposition from lawmakers representing higher-cost areas of the country, where homes can run much more than $500,000. Current law puts a ceiling of $1 million on the break.
The bill would keep the current deduction on existing homes.
The housing industry had already planned to oppose the bill because of another provision.
The GOP bill nearly doubles the standard deduction in the tax code, which home builders argue will reduce the number of people who would take the mortgage deduction and concentrate the deduction-takers at the top of the income scale.
That, they believe, could cut into home sales and hurt the economy.
The National Association of Home Builders has been working with lawmakers on a tax credit for homeowners that could be taken regardless of income and would replace the mortgage deduction and the deduction for state and local property taxes. But lawmakers did not include that idea in their legislation.
This story has been updated.
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