Buying a Home is No Longer an Attractive Tax Break for Most Americans
The Center on Budget and Policy Priorities (CBPP) has noted that consumers participating in focus groups rarely mention tax breaks as an incentive to purchase a home these days. Experts say these consumers have a point, for two reasons.
With interest rates low and the standard deduction allowed by the IRS on the rise, mortgage interest is simply not a qualifying deduction for most middle- and lower-income Americans these days. What was once considered a major incentive to purchase a home is now something that applies mostly to high income earners purchasing expensive real estate.
The CBPP believes that the federal government should repurpose the $70 billion spent annually on the mortgage interest deduction for wealthy buyers and, instead, create a mortgage interest credit that would benefit more Americans and help those with lower incomes afford to become homeowners.
The CBPP has advocated for such a credit in the halls of Congress, but the proposal has gained little traction as of yet. Still, with rental rates on the rise and home affordability declining, the CBPP believes the federal government will be forced to reevaluate housing affordability assistance programs in the near future.
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