Subject: Loan Interest Deductions Comment: Dear President’s Tax Reform Advisory Panel: I have many friends in Real Estate, all homeowners, and expressed their concerns to their industry if a cut in interest deduction on your primary home loan occurs. I am a businessman and recently purchased a home. During the time I was a potential buyer, most of my decisions were based on what I can put down as a downpayment, and what my loan options and interest rates would be. From there, I figured what interest I could deduct, and that determined my price range I could afford, with the consideration of " What monthly allowance can my family live on?" Deducting 100% of the interest on your primary home loan is key for supply and demand. From the demand side, potential buyers, knowing they can deduct 100% of the interest on loans less that $1M, would have a consistent message, maintain a consistent budget knowing what you can deduct, and help achieve your financial goals with your home. From this, your budget tells you what you can afford. Buying homes helps the economy, and the thought of reducing the possible interest deductions would be devastating to the entire home economy for homeowners, and most importantly, POTENTIAL HOMEOWNERS trying to achieve their dreams. From the supply end, more homeowners and potential buyers drive American contractors to build more homes, helping the economy in many aspects of growth. Also, homeowners drive demand of contractors and raw materials because they want to improve and upgrade their homes. If there is the potential of interest deductions being reduced in your primary home loan, then building would slow, renters would be at a record high, and homeowners would lose, my guess, 30% on their home value. This would trigger a recession in many areas of the country, which would cause extreme problems. Keep the interest deductions the way they are. Americans are used to it, and all the potential homeowners look forward and budget to it. For many Americans, your home is your biggest investment. If a cut in deductions on primary home loan interest occurs, your investment will drop in value. Other people can buy your home from you at a lower price, but their investment will not appreciate either from lack of demand, thus a never-ending loop of bad investments lingering forever. |