Mark's Notebook


	If you believe everything you read, better not read. - Japanese Proverb

Mortgage deduction on block?

San Francisco Chronicle

Thursday 13 October 2005, 2:52 pm
Keywords: News Articles

by Kathleen Pender

President Bush's Advisory Panel on Federal Tax Reform is likely to propose next week a change in the deduction for home-mortgage interest that, if adopted by Congress, would have a drastic impact on the Bay Area and other regions with high housing prices.

Today, a married couple filing jointly can deduct interest on up to $1 million in mortgage debt. In a meeting Tuesday, the panel agreed to recommend lowering that limit, perhaps to the maximum mortgage that can be guaranteed by the Federal Housing Administration. The FHA limit varies by region, but in the Bay Area and most of coastal California is $312,895.

Such a plan is not likely to pass Congress, but it could spark interest in changing the hallowed mortgage-interest deduction.

"I think it's dead on arrival," says Ken Rosen, professor of real estate and urban economics at UC Berkeley's Haas School of Business. "It's very biased against California and New York and favorable to Texas." The FHA loan limit throughout Texas is $172,632. That's more than enough to buy a median-priced home in Houston ($142,500) or Dallas ($149,100), according to the Realtors Association.

http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/10/13/BUG8VF7
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