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Preserve Maryland’s Mortgage Interest Deduction

Since 1913, the tax code has promoted homeownership by allowing a deduction for mortgage interest, and Maryland has never reduced it.

 

Written by: Bonnie Casper, President of Greater Capital Area Association of REALTORS and Stephen J. Nardella, President of Maryland National Capital Building Industry Association           

Governor Martin O'Malley's proposed budget reduces mortgage interest and property tax deductions for many Maryland homeowners.

As the Greater Capital Area Association of REALTORS, representing the more than 6,000 real estate professionals, and home builders in Montgomery County, we have grave concerns about this proposal’s negative effect on housing.

Since 1913, the tax code has promoted homeownership by allowing a deduction for mortgage interest, and Maryland has NEVER reduced it. 

This is sound public policy, consistent with our longstanding tradition of encouraging homeownership, the cornerstone of the American dream. 

There is good reason for this policy. Housing and real estate account for nearly one-fifth of Maryland’s gross state product, and the sector traditionally leads our local, state, and national economy out of recession into economic growth. 

Indeed, Maryland’s economic recovery will not happen without a recovery first in our housing market.

Maryland ranks 10 among other states as being most dependent on real estate taxes. Real estate already accounts for 49 percent, almost half, of revenues to our local governments. Maryland property owners already pay at least their fair share in supporting state and local services. 

We urge Governor O’Malley and the members of the Maryland General Assembly to rethink this unwise proposal.

We call on all County residents to contact their elected officials to oppose this proposal. For more information and to contact your elected representatives, go to: http://www.savemdmid.com/.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

real estate realist February 28, 2012 at 07:39 PM
Real estate agents are the last people anyone should turn to for advice about economics. They - along with mortgage brokers and big banks - are responsible for the massive real estate bubble and inevitable apocalypse of the past decade. Here's the deal with the mortgage deduction. When you make something cheaper, people buy more of it than they would otherwise. When you make it cheaper to buy a house, people borrow more money and buy more expensive and bigger houses. Higher prices and more transactions is great for the real estate agents, since the industry cartel ensures that they get their outrageous 6% cut on every transaction. Its great for the banks; bigger mortgages=bigger profits, especially since the more a family borrow, the higher risk they become, and so can be charged even higher interest rates. It may not be so great for homeowners who end up with mortgages that are bigger than they can wanted. It may not be so great for people living next door to lot-line to lot-line mcmansions. It may not be so great for people who prefer walkable mixed-use space to sprawling suburbs. If it were me, I would cap the total amount you can deduct per year ($40k/year?) rather than tie it to income and I would give a greater benefit to houses coming out of foreclosure, but in principle there's nothing wrong with limits on mortgage deductions. As a Maryland voter, I urge my representatives to support the governor's proposal.
jag February 28, 2012 at 07:58 PM
"This is sound public policy" Yeah, artificially inflating the value of homes through tax breaks didn't just contribute to a massive economic collapse or anything like that. Really, really sound policy, obviously.
real estate realist February 28, 2012 at 10:28 PM
Also, this: "Since 1913, the tax code has promoted homeownership by allowing a deduction for mortgage interest" - is completely untrue. Income taxes were introduced in 1913. When introduced the tax only applied to the top 1% of the population, who generally needed no loans much less incentives to buy a house. In fact interest was only deductible because it was generally a business expense - most mortgages were used to buy a farm or a store, or to buy property that you rented out, not to to buy a personal house. Using the tax break to encourage home ownership came much later.
Bob March 02, 2012 at 12:19 PM
In fact, all deductions are equally at risk, not only mortgage interest and property taxes.
hmj March 02, 2012 at 12:55 PM
This is the result of out of control spending by the Gov and his far left friends in the Generally Assembly. Shift the burden wasteful spending to others. Taxes are already too high on law biding taxpayers. Just say no to those Dems that want to spend more and more on welfare programs for freeloaders and deadbeats.
Sara April 13, 2012 at 05:13 PM
I like your cap idea. Real estate realist.

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