Eliminating the mortgage-interest deduction is a looming option for cutting the nation's budget deficit. Realtors are taking to the road to fight against that and other issues they believe will hurt the already ailing housing market.
Thursday morning, the National Association of Realtors homeownership bus, painted red, white and blue, rolled into Phoenix and parked in front of the wine bar and restaurant Postino on Phoenix's Central Avenue. Local and regional NAR leaders, as well as several agents, were there to protest the potential loss of the tax deduction as well as lower loan limits on government-backed mortgages.
"The mortgage deduction is a hot button for not only Realtors but homeowners," said Holly Mabery, of the Keller Williams Heartland Group, at the event.
According to NAR data, the average mortgage deduction for Arizona homeowners was about $14,000 last year. That's only a few thousand dollars more than the standard tax deduction. The deduction essentially drops the taxable income of homeowners because they can deduct the interest they pay on their mortgage in a year.
Susan Ramsey of Re/Max Integrity of Glendale said the tax deduction gives hundreds of thousands of Arizona homeowners an extra $2,000 to $5,000 from their tax refund.
Ramsey, president of the Phoenix Association of Realtors, said that's money that goes back into the economy, and metro Phoenix's economy needs it.
Much of the debate over the mortgage deduction is because it benefits the wealthy more than middle-class homeowners. The pricier the home and higher the mortgage, the bigger the deduction is for the tax filer.
According to the Internal Revenue Service, about 75 percent of U.S. homeowners who claimed the tax deduction in 2009 earned at least $100,000. Fewer than 25 percent of homeowners earning about $50,000 benefited from the mortgage-interest deduction.
A lot of figures on how much the mortgage deduction costs the U.S. government have been bandied about in this debate, ranging from $800 million to $130 billion a year.
And no one disputes that wealthier taxpayers save much more with the deduction than the middle class, which has been hard hit by the recent economic downturn.
One concern in metro Phoenix involves people who continue to pay on a mortgage larger than their house is worth. If they lose the tax deduction, will that be the final incentive to walk away from their home and loan?
Realtors are also concerned about the psychological impact of losing the deduction.
Christopher Paris, an agent with HomeSmart Elite in north central Phoenix and the incoming Phoenix Realtors president, said too many potential buyers are hesitant to purchase now because of the economy, and the loss of the tax deduction will make things worse for the housing market.
Realtors are also fighting for conforming mortgage limits to climb back to 125 percent of an area's local median price. Congress recently lowered the loan limit to 115 percent.
The Realtors' bus was in Tucson on Friday night and is making its way to Anaheim, Calif., for the group's annual meeting.
by Catherine Reagor The Arizona Republic Oct. 21, 2011 04:28 PM
Thursday morning, the National Association of Realtors homeownership bus, painted red, white and blue, rolled into Phoenix and parked in front of the wine bar and restaurant Postino on Phoenix's Central Avenue. Local and regional NAR leaders, as well as several agents, were there to protest the potential loss of the tax deduction as well as lower loan limits on government-backed mortgages.
"The mortgage deduction is a hot button for not only Realtors but homeowners," said Holly Mabery, of the Keller Williams Heartland Group, at the event.
According to NAR data, the average mortgage deduction for Arizona homeowners was about $14,000 last year. That's only a few thousand dollars more than the standard tax deduction. The deduction essentially drops the taxable income of homeowners because they can deduct the interest they pay on their mortgage in a year.
Susan Ramsey of Re/Max Integrity of Glendale said the tax deduction gives hundreds of thousands of Arizona homeowners an extra $2,000 to $5,000 from their tax refund.
Ramsey, president of the Phoenix Association of Realtors, said that's money that goes back into the economy, and metro Phoenix's economy needs it.
Much of the debate over the mortgage deduction is because it benefits the wealthy more than middle-class homeowners. The pricier the home and higher the mortgage, the bigger the deduction is for the tax filer.
According to the Internal Revenue Service, about 75 percent of U.S. homeowners who claimed the tax deduction in 2009 earned at least $100,000. Fewer than 25 percent of homeowners earning about $50,000 benefited from the mortgage-interest deduction.
A lot of figures on how much the mortgage deduction costs the U.S. government have been bandied about in this debate, ranging from $800 million to $130 billion a year.
And no one disputes that wealthier taxpayers save much more with the deduction than the middle class, which has been hard hit by the recent economic downturn.
One concern in metro Phoenix involves people who continue to pay on a mortgage larger than their house is worth. If they lose the tax deduction, will that be the final incentive to walk away from their home and loan?
Realtors are also concerned about the psychological impact of losing the deduction.
Christopher Paris, an agent with HomeSmart Elite in north central Phoenix and the incoming Phoenix Realtors president, said too many potential buyers are hesitant to purchase now because of the economy, and the loss of the tax deduction will make things worse for the housing market.
Realtors are also fighting for conforming mortgage limits to climb back to 125 percent of an area's local median price. Congress recently lowered the loan limit to 115 percent.
The Realtors' bus was in Tucson on Friday night and is making its way to Anaheim, Calif., for the group's annual meeting.
by Catherine Reagor The Arizona Republic Oct. 21, 2011 04:28 PM