The mortgage interest tax deduction that 38% of Maryland homeowners take advantage of could go away if a new bill introduced is passed.

According to the Maryland Association of REALTORS(R) Action Alert about the reduction in tax deduction,

“Under the proposal, if a Maryland taxpayer’s federal adjusted gross income exceeds $100,000; single taxpayer’s itemized deductions would decrease by 10% when calculating Maryland taxable income – that’s an INCREASE in your Maryland taxable base! Taxpayers with adjusted gross income over $200,000 would see their deductions decrease by 20%!”

That is A LOT of money that 38% of Marylanders would lose!

20% of Maryland homes are already underwater, and this could bring values down further, as I talked about last January when the government wanted to remove the mortgage interest tax deduction across the US.

That bill was voted down, and now our state is trying it to reduce our deficit.

The Maryland Bill in discussion is Budget Reconciliation and Financing Act of 2012 (BRFA, HB 87/SB 152).

If you feel that the reduction in mortgage interest tax deductions could affect either you or your home’s value, this link should take you to the Action Center, where you can enter your information and email your upper & lower state chamber representatives.

I hope we can keep our Maryland real estate market on the upturn, rather than see it turn downward.