The GOP's new tax proposal allows homeowners to deduct interest on mortgage debt totaling $500,000 or less, half of the current $1 million threshold. About 42 percent of U.S. households are paying off their mortgage, and 2.5 percent are paying off mortgages for homes $500,000 or more, per United for Homes' report.
While weighing the actual effects this bill would have on the American household, the Denver Post cites the National Low-Income Housing Coalition's 2015 report, saying, “There is no policy rationale for the federal government to continue to subsidize mortgages of more than $500,000 ... Certainly the few people who can afford to borrow more than $500,000 in home mortgages can afford to pay more in taxes.”
Diane Yentel, President & CEO National Low Income Housing Coalition, said in an email that “Congress should reinvest the savings from the MID reform into affordable housing solutions, like the national Housing Trust Fund, rental assistance, or a renter’s credit, that would help the lowest income people in America.”
