The incoming administration of president-elect Donald Trump may reduce mortgage interest deductions, according to Treasury Secretary nominee Steve Mnuchin, reported Forbes. “We’ll cap the mortgage interest, but we’ll allow some deductibility,” said Mnuchin on CNBC.
The Tax Policy Center estimates that 40 million households benefit from mortgage interest deductions. Low-income homeowners who don’t pay federal taxes, as well as households that own their homes outright would not be affected.
Understandably, the real estate industry is opposed to any cuts in mortgage interest deductions, because it undermines one of the benefits of buying a home. The industry is especially eager to convert a greater number of millennials from renters to home owners. A mortgage interest deduction definitely strengthens the argument for buying instead of renting. “We would strongly oppose any attempt to limit or eliminate the mortgage interest deduction. Realtors know that the MID is an important benefit not just for the millions of current homeowners who depend on it, but also for renters looking to make the transition into homeownership,” said William E. Brown, president of the National Association of Realtors.