Don’t let tax overhaul charge homeowners twice
Tax reform is important, but the final product should reflect the tremendous value that homeownership offers the community.
Tax reform proposals swirling around Washington, D.C., right now make sweeping changes to the tax benefits on which homeowners have come to depend. Here in New Mexico, it has major implications.
Based on 2014 data from the National Association of Realtors, roughly 509,000 homeowners in New Mexico had a mortgage, and 157,500 claimed a deduction for mortgage interest that year — a grand total of nearly $1.3 billion in deductions.
That deduction, however, could have far less value if Congress goes through with a plan to double the standard deduction, as many fewer homeowners would itemize their taxes, taking the mortgage interest deduction off the table.
That’s far from the only deduction homeowners will lose out on, either. Homeowners are allowed to deduct the property taxes they pay to state and local governments, but that deduction is on the chopping block for elimination.
The most recent IRS data available show that at a marginal rate of 25 percent, the average taxpayer in New Mexico saved $640 in taxes as a result of the state and local property tax deduction. Congress is looking to reclaim those savings, taking it right from the pockets of homeowners. That means homeowners will experience “double taxation” as their income is taxed at the federal level and then again for state and local property taxes.
Tax reform is important, but the final product should reflect the tremendous value that homeownership offers the community. If you own a home, or aspire to someday, you’d be wise to let congressional leaders know where you stand.
Melissa Pippin-Carson is a Santa Fe Realtor and serves as president of the Santa Fe Association of Realtors.