Homebuilders Oppose GOP Plan to Reduce Mortgage Interest Deductions

GOP lawmakers are proposing a 50 percent reduction in the amount mortgage interest deductions that homeowners can claim on their tax returns, according to the Mercury News. The proposal, part of the GOP plan to overhaul the U.S. tax code, calls for a $500,000 cap on mortgage interest deductions, half of the current $1 million allowable interest deduction.

Understandably, the proposal is being met with some consternation from homeowners in places with high property values, such as the San Francisco Bay Area, where the median home price in September was $768,000 and in Washington D.C., where six of the top 10 areas for average home mortgage interest deductions are located:  Loudoun, Falls Church ($5,450), Fairfax County ($4,805), Calvert County ($4,677), Stafford County ($4,667) and Howard County ($4,656).

Jerry Howard, chief executive of the National Association of Home Builders, is vowing that his group would fight the bill “tooth and nail,” claiming that it could lead to a decline in home prices and a housing recession. “This now is a direct assault on the American dream of homeownership,” he said in an interview.