Editor’s note: Here’s one that will take a big bite out of our region’s economy, highly dependent on real estate and second home buying. It’s good to see our government getting serious about the deficit, though. Of course, “the devil is in the details.”
At 70, Frank White isn’t a typical first-time home buyer. But a key reason he ditched his Altadena apartment and bought a three-bedroom house in nearby Pasadena has been common for decades: He wanted the tax break.
“I pay very high taxes, and I have no deductions,” said White, who owns an apartment rental business with his two brothers. Now, after purchasing the $500,000 home in November, he’s looking forward to writing off the interest on his 30-year mortgage.
But the longtime tax break could face major changes as Washington policymakers search for ways to reduce the deficit as part of the debate on the so-called fiscal cliff. And that’s sending shivers through home buyers such as White and much of the housing industry.
“My deductions are important to me, what few I have,” White said. “We need to go after the corporations that don’t pay a … cent. Let’s go after those guys first. But leave me alone.”
The home mortgage interest deduction is one of the most cherished in the U.S. tax code. It’s also one of the most expensive, estimated to cost the federal government $100 billion this fiscal year.
The rest of the article is here.
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