Hatch Calls Reduced Mortgage Interest Deduction Likely; Reaction Mixed
Recent support from Sen. Orrin Hatch (R-Utah) to scale back tax deductions for home loan interest payments drew positive feedback from at least a couple of interested observers May 13, though not from the housing industry.
Hatch, speaking May 11 at the American Bar Association Section of Taxation 2013 May meeting, said it is “likely” the mortgage interest deduction would be limited to a first home on “anything below $500,000” if tax reform legislation were enacted. Current law allows homeowners to deduct interest paid on mortgages for both first and second homes up to $1 million in mortgage debt, plus the interest on an additional $100,000 of debt through home equity lines of credit.
Lawmakers in the Senate and House are considering a number of different options to overhaul the tax code, and Hatch is working with his colleagues to examine elements such as tax expenditures, including the mortgage interest deduction, to improve efficiency and competitiveness for households and businesses.