Lawmakers in the U.S. House of Representatives have a new mandate from Speaker John Boehner to reduce government spending, and have honed in on a tax break that allows consumers to write off the amount they pay in interest on their home loans. However, some in the housing industry are readying for a fight.
Congress is mulling a repeal of a tax break for some consumers that allows them to deduct the amount they paid to lenders in mortgage interest, according to a report from the Arizona Daily Sun. However, the National Association of Homebuilders has increased efforts to lobby against the change, fearing the repeal would set back the still-recovering housing industry by dampening demand for new properties.
“This is a huge benefit for 35 million taxpayers a year,” Robert Dietz, who oversees tax policy and issues for the NAHB, told the newspaper. “And the biggest beneficiaries are middle-class families and younger home buyers.”
The idea of repealing this tax break has been considered by lawmakers in the past, but the housing industry has typically banded together to keep it, the report said. Both the National Association of Realtors and the Mortgage Bankers Association have successfully beaten back opposition to the tax break.
Most consumers pay hundreds or even thousands of dollars in mortgage interest every year, and repealing the tax break for this expense would likely cause many to face greater financial hardship.