In a December column, I wrote about how increased pressure to reduce the national deficit could lead to elimination of the mortgage interest deduction.
As an incentive for middle class homebuyers, the deduction has long been a sacred cow for those in the real estate industry. But it’s the second most expensive tax break, costing the government over $100 billion a year, and some believe that it’s too costly to continue.
In November, President Obama’s deficit commission proposed a change that would have eliminated the deduction for homeowners in the $500,000 to $1 million range. The proposal didn’t make it out of committee, but the Wall Street Journal is reporting today that Obama may broach the issue again at the State of the Union address tonight.
If that happens, the WSJ said the National Association of Homebuilders will “go on the warpath” to protect the deduction.
I’ll be interviewing Colorado Housing and Building Association President Kyle Campbell today for this week’s issue, and will be sure to have him to weigh-in on the matter.
Check back Friday for his response.