HMID - Is it really going away?

[LAtoOC]

I am torn on this issue -http://blogs.forbes.com/janetnovack...eficit-panel-proposal/?boxes=Homepagechannelshttp://www.fiscalcommission.gov/sit...es/documents/Illustrative_List_11.10.2010.pdf

If tax breaks stop at $500k (which is a modest amount and most of America would still be fine) and the overall deduction is reduced substantially, how much do you think home prices might fall? 10%? more? less?

 

[irvinehomeowner]

I think this will have a hard time passing.

And even if it does... its effect on home prices will not be directly proportional.

When you calculate your payments on a home... do you take into account the deduction? I don't. I know that there will be a savings come tax time but as far as I'm concerned, I will be paying that amount every month and that's what I budget for.

But I figure that balances out for the extra Mello Roos and HOA I'm paying for. 

 

[LAtoOC]

For us it is definitely included in our Rent vs Own worksheet (not the NYTimes site, a custom Excel we made at home).

Looks like we will be renting for awhile longer!

 

[Irvine2Irvine]

If that causes more people to rent, then the rent price may go up as a side effect.

 

[usctrojancpa]

I'm not planning on having a mortgage of more than $417k so I don't really care if they do lower the threshold to $500k.  If they get rid of it entirely, I'll just wait until the rent vs. own calculation makes sense.

 

[octrends]

but overall we won't lose or gain much since tax bracket is also being reduced.

 

[LAtoOC]

So it looks like this will be shelved (for now) and a lot of people will be receiving an extra $2100 next year care of the SS pay-roll tax break.