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.
The Govenor must be crazy. Decreasing the mortgage interest rate deduction at anytime is dumb; with the housing market just starting to turn around even proposing such a measure is pure insanity.
Present home owners bought with knowledge that the interest rate would be deducted from there taxes and probably stretch to do the loan.
A new home buyer, would stop and say to a seller “I am losing $50,000″ in tax deductions over the next 20 years–DROP YOUR PRICE.
Owners who already pay high CIty and State Property Tax and barely can pay their mortgages, might just say..”I cannot do this anymore ….” and walk away and default on the mortgage or get a job in another state and rent his home…MD gains the new “tax” but loses a wage earner.
NOT A GOOD IDEA GOVERNOR
Hi Phil, I don’t think it has been carefully examined, to understand the sheer number of people this would affect, and yes, how it will hurt the recovering housing market.
The Greater Baltimore Board of REALTORS(R) is having a rally in Annapolis next week, and we are hoping that our legislatures understand at that point the seriousness of this proposal!
This quote is from your announcement above: 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.
Looking at foreclosure statistics, it is NOT single taxpayers making over $100,000 net or gross who are losing their homes- unless they tried to buy at the maximum end of their budget and then refinanced and addded on to their homes trying to outdo the neighbors. The majority of people in foreclosure are singles and couples with incomes less than $100K. who were forced to buy when the market was high and cannot refinance as they are in that catch-22 of difficulty making payments so have been late BUT could make the payments IF they could refinance. I totally agree with this bill. If the tax relief was for those making less than $100,000 I would protest it.