President Bush’s Tax Reform Commission agreed to limit the amount of mortgage interest a homeowner may deduct from their taxes.
The cap and how it would be determined has not yet been decided. One possibility is basing it on FHA’s current mortgage cap, which, is now at $312,895. I don’t know how they’ll use that but the details will be finalized in a meeting scheduled for October 18, 2005.
Currently a homeowner can deduct mortgage interest on a loan up to $1,000,000. A lower limit could affect many homeowners in California because we have the most over 1 mil homes.
As Vince Malta put it, “Real estate has been driving the economy, but it won’t much longer” if mortgage deductions are curtailed.
Read the full text of the latimes.com article here, latimes.com.