{"id":171421,"date":"2024-05-03T15:33:48","date_gmt":"2024-05-03T21:33:48","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=171421"},"modified":"2024-05-03T15:34:42","modified_gmt":"2024-05-03T21:34:42","slug":"mortgage-interest-deduction-is-not-a-fight-worth-fighting","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/mortgage-interest-deduction-is-not-a-fight-worth-fighting","title":{"rendered":"The Mortgage Interest Deduction Is Overrated and Definitely Not Something to Fight Over"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">After the National Association of Realtors agreed&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/national-association-of-realtors-to-pay-418-million-and-remove-commission-standards-as-part-of-settlement\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">to pay $418 million<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and eliminate the 6% commission to settle the lawsuit against it, attention in some quarters is now&nbsp;<\/span><span data-preserver-spaces=\"true\">being turned<\/span><span data-preserver-spaces=\"true\">&nbsp;to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nerdwallet.com\/article\/taxes\/mortgage-interest-rate-deduction\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the mortgage interest deduction<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Given&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-silent-war-on-tenant-screening\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the wave of anti-real estate investor legislation<\/span><\/a><span data-preserver-spaces=\"true\">, it would seem like the mortgage interest deduction is the next domino to fall. But not all \u201cfalls\u201d are created equal. The fact&nbsp;<\/span><span data-preserver-spaces=\"true\">of the matter<\/span><span data-preserver-spaces=\"true\">&nbsp;is that the mortgage interest deduction is not particularly important. Removing it would have a negligible impact and is most certainly not a hill for real estate investors to die on.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For one, the mortgage interest deduction only amounts to a tax savings of around&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.brookings.edu\/articles\/chipping-away-at-the-mortgage-deduction\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$30 billion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">a year<\/span><span data-preserver-spaces=\"true\">&nbsp;(down from $60 billion after the Tax Cuts and Jobs Act of 2017). That may sound like a lot, but it\u2019s&nbsp;<\/span><span data-preserver-spaces=\"true\">important<\/span><span data-preserver-spaces=\"true\">&nbsp;to put this in context:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">In 2021, states collected&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.statista.com\/statistics\/249133\/us-state-and-local-property-tax-revenue\/#:~:text=In%202021%2C%20state%20and%20local,U.S.%20dollars%20in%20property%20taxes.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$630.2 billion in property taxes<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;alone.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">There were&nbsp;<\/span><span data-preserver-spaces=\"true\">a total of<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.statista.com\/statistics\/226144\/us-existing-home-sales\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">4.1 million home sales<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in 2023&nbsp;<\/span><span data-preserver-spaces=\"true\">at<\/span><span data-preserver-spaces=\"true\">&nbsp;an&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.statista.com\/statistics\/240991\/average-sales-prices-of-new-homes-sold-in-the-us\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">average price of $511,100<\/span><\/a><span data-preserver-spaces=\"true\">,&nbsp;<\/span><span data-preserver-spaces=\"true\">making for $2.1 trillion in total volume<\/span><span data-preserver-spaces=\"true\">.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">The federal government collected&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cbo.gov\/publication\/59730\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$4.4 trillion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in taxes in 2023.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">The value of<\/span><span data-preserver-spaces=\"true\">&nbsp;all real estate in the United States is estimated to be approximately&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.benoitproperties.com\/news\/total-value-of-all-us-residential-real-estate-hits-record-47-trillion\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$47 trillion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;as of June 2023.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, in the end, the mortgage deduction is small potatoes.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What the Mortgage Interest Deduction Is, and What Eliminating Would Do<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.investopedia.com\/articles\/mortgages-real-estate\/11\/calculate-the-mortgage-interest-math.asp\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">mortgage interest deduction<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\">&nbsp;allows homeowners who itemize their deductions to deduct interest payments on up to $750,000 of their loan principal.<\/span><span data-preserver-spaces=\"true\">&nbsp;(It was $1 million until the Tax Cuts and Jobs Act of 2017.)&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\">&nbsp;is&nbsp;<\/span><span data-preserver-spaces=\"true\">not&nbsp;<\/span><span data-preserver-spaces=\"true\">actually<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">a&nbsp;<\/span><span data-preserver-spaces=\"true\">particularly large<\/span><span data-preserver-spaces=\"true\">&nbsp;deduction.<\/span><span data-preserver-spaces=\"true\">&nbsp;Remember,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nerdwallet.com\/article\/taxes\/standard-deduction\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">the standard deduction<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is $14,600 for single filers and $29,200 for married couples filing jointly in 2024.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Most homeowners still have mortgages&nbsp;<\/span><span data-preserver-spaces=\"true\">that&nbsp;<\/span><span data-preserver-spaces=\"true\">were<\/span><span data-preserver-spaces=\"true\">&nbsp;taken out<\/span><span data-preserver-spaces=\"true\">&nbsp;before rates skyrocketed in mid-2022.&nbsp;<\/span><span data-preserver-spaces=\"true\">So, for<\/span><span data-preserver-spaces=\"true\">&nbsp;example, if someone has a $750,000 loan amortized over 30 years at 3% interest, the annual mortgage interest would only amount to $22,809.59, which is&nbsp;<\/span><span data-preserver-spaces=\"true\">actually<\/span><span data-preserver-spaces=\"true\">&nbsp;less than the jointly filed standard deduction.<\/span><span data-preserver-spaces=\"true\">&nbsp;But even on a $750,000 loan amortized over 30 years at 7% interest, it only amounts to $52,258.65 of interest in year one (and less every year&nbsp;<\/span><span data-preserver-spaces=\"true\">thereafter<\/span><span data-preserver-spaces=\"true\">).&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In the highest tax bracket as of this writing (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/smartasset.com\/taxes\/current-federal-income-tax-brackets\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">37%<\/span><\/a><span data-preserver-spaces=\"true\">)&nbsp;<\/span><span data-preserver-spaces=\"true\">that would&nbsp;<\/span><span data-preserver-spaces=\"true\">amount to saving<\/span><span data-preserver-spaces=\"true\">&nbsp;$19,335.70 on one\u2019s taxes versus just $10,804 for the standard deduction for those filing jointly.<\/span><span data-preserver-spaces=\"true\">&nbsp;That amounts to a savings of $9,335.70. Not bad, but nothing to write home about.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\">&nbsp;is why it<\/span><span data-preserver-spaces=\"true\">&nbsp;shouldn\u2019t be surprising that the mortgage interest deduction only results in $30 billion of savings each year, or about 0.68% of what the federal government collects in tax revenue.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Now,<\/span><span data-preserver-spaces=\"true\">&nbsp;if someone has multiple other deductions like charitable donations or medical expenses, the total savings from the mortgage interest deduction in the previous example could be as much as $19,335.70 over and above the standard deduction.<\/span><span data-preserver-spaces=\"true\">&nbsp;But the only people saving this amount would be affluent.&nbsp;&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\">&nbsp;is<\/span><span data-preserver-spaces=\"true\">&nbsp;the primary criticism of the mortgage interest deduction<\/span><span data-preserver-spaces=\"true\">, namely<\/span><span data-preserver-spaces=\"true\">&nbsp;that it amounts to a regressive tax (or tax break, to be precise), which is the&nbsp;<\/span><span data-preserver-spaces=\"true\">key<\/span><span data-preserver-spaces=\"true\">&nbsp;point its critics make.<\/span><span data-preserver-spaces=\"true\">&nbsp;As Katheryn Anne Edwards&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/opinion\/articles\/2024-03-25\/after-exposing-realtors-eliminate-the-mortgage-interest-deduction?srnd=homepage-americas\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">tells<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;Bloomberg:<\/span><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">\u201cThe policy&#8217;s weakness is exposed by who benefits. The only households that can claim the deduction are those that itemize expenses, and they are predominantly in higher income tax brackets. This cohort generally doesn&#8217;t need to rely on the deduction to buy a home and service the mortgage, so it only\u00a0serves to push\u00a0up the amount of debt they can take on and, as a result, home prices at the middle and top ends of the market.\u201d<\/span><\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"654\" height=\"348\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image1.jpeg\" alt=\"Distribution of mortgage interest tax deduction expenditure by income class (2020) - Bloomberg\" class=\"wp-image-171424\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image1.jpeg 654w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image1-300x160.jpeg 300w\" sizes=\"auto, (max-width: 654px) 100vw, 654px\" \/><figcaption class=\"wp-element-caption\"><em>Distribution of mortgage interest tax deduction expenditure by income class (2020) &#8211; <a href=\"http:\/\/bloomberg.com\" target=\"_blank\" rel=\"noreferrer noopener\">Bloomberg<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Edwards believes it is at least likely that \u201cdoing away with the mortgage interest deduction is an actionable policy the federal government can take\u201d to improve home affordability.&nbsp;<\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\">&nbsp;is highly doubtful, as the policy has a negligible effect overall, and housing prices are&nbsp;<\/span><span data-preserver-spaces=\"true\">being<\/span><span data-preserver-spaces=\"true\">&nbsp;driven<\/span><span data-preserver-spaces=\"true\">&nbsp;by increased demand without a corresponding increase in supply<\/span><span data-preserver-spaces=\"true\">. Indeed<\/span><span data-preserver-spaces=\"true\">, cutting the total savings to taxpayers from the mortgage interest deduction in half after the 2017 tax cut certainly didn\u2019t slow real estate price appreciation&nbsp;<\/span><span data-preserver-spaces=\"true\">in the slightest<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Correspondingly, it\u2019s&nbsp;<\/span><span data-preserver-spaces=\"true\">quite<\/span><span data-preserver-spaces=\"true\">&nbsp;clear that there isn\u2019t&nbsp;<\/span><span data-preserver-spaces=\"true\">much,<\/span><span data-preserver-spaces=\"true\">&nbsp;if any, economic benefit to having the mortgage tax deduction. As a subsidy for homeownership, it doesn\u2019t make a lot of sense, given it generally benefits wealthier people who&nbsp;<\/span><span data-preserver-spaces=\"true\">generally<\/span><span data-preserver-spaces=\"true\">&nbsp;don\u2019t have a problem buying a home in the first place. In short, helping affluent people who should be buying homes worth $650,000&nbsp;<\/span><span data-preserver-spaces=\"true\">to<\/span><span data-preserver-spaces=\"true\">&nbsp;instead buy homes worth $700,000<\/span><span data-preserver-spaces=\"true\">&nbsp;should not be a pressing government concern.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And<\/span><span data-preserver-spaces=\"true\">&nbsp;as a stimulus to the housing market<\/span><span data-preserver-spaces=\"true\">, it\u2019s also completely unnecessary<\/span><span data-preserver-spaces=\"true\">, as housing is&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/MSPUS\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">almost as expensive as it has ever been<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;If anything, we have the opposite problem.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Studies tend to show&nbsp;<\/span><span data-preserver-spaces=\"true\">very small<\/span><span data-preserver-spaces=\"true\">&nbsp;and generally&nbsp;<\/span><span data-preserver-spaces=\"true\">negative<\/span><span data-preserver-spaces=\"true\">&nbsp;effects.&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.taxpolicycenter.org\/publications\/new-evidence-effect-tcja-housing-market\/full\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">A study<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;by the nonpartisan Tax Policy Center found that the 2017 changes to the mortgage interest deduction had a&nbsp;<\/span><span data-preserver-spaces=\"true\">very minimal effect that&nbsp;<\/span><span data-preserver-spaces=\"true\">was<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">completely<\/span><span data-preserver-spaces=\"true\">&nbsp;offset<\/span><span data-preserver-spaces=\"true\">&nbsp;by the same law\u2019s tax reduction.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Another&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.aeaweb.org\/articles?id=10.1257\/pol.20170366\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">study<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;from Denmark<\/span><span data-preserver-spaces=\"true\">&nbsp;found that \u201cthe mortgage deduction has a precisely estimated zero effect on homeownership for high<\/span><span data-preserver-spaces=\"true\">&#8211;&nbsp;<\/span><span data-preserver-spaces=\"true\">and<\/span><span data-preserver-spaces=\"true\">&nbsp;middle-income households.\u201d<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=2002865\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">An international survey<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;found that \u201cthe empirical evidence suggests that, contrary to popular wisdom, the [mortgage interest deduction] generally does not increase the ownership rate.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If anything, removing<\/span><span data-preserver-spaces=\"true\">&nbsp;the mortgage interest deduction would likely have a slightly positive effect.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/pubs.aeaweb.org\/doi\/pdfplus\/10.1257\/aer.20141751\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">A study<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in the&nbsp;<\/span><em><span data-preserver-spaces=\"true\">American Economic Review<\/span><\/em><span data-preserver-spaces=\"true\">&nbsp;found that \u201celiminating the mortgage interest deduction causes house prices to decline, increases homeownership, decreases mortgage debt, and improves welfare.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But as the charts in the study show, the effects, while significant, are tiny.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"507\" height=\"158\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image2.jpeg\" alt=\" Home and rent price transition after elimination of mortgage interest deduction - Kamila Sommer and Paul Sullivan, \u201cImplications of US Tax Policy for House Prices, Rents, and Homeownership,\u201d American Economics Review\" class=\"wp-image-171425\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image2.jpeg 507w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2024\/05\/image2-300x93.jpeg 300w\" sizes=\"auto, (max-width: 507px) 100vw, 507px\" \/><figcaption class=\"wp-element-caption\"><em> Home and rent price transition after elimination of mortgage interest deduction &#8211; Kamila Sommer and Paul Sullivan, \u201cImplications of US Tax Policy for House Prices, Rents, and Homeownership,\u201d <a href=\"https:\/\/www.aeaweb.org\/articles?id=10.1257\/aer.20141751\" data-type=\"link\" data-id=\"https:\/\/www.aeaweb.org\/articles?id=10.1257\/aer.20141751\" target=\"_blank\" rel=\"noopener\">American Economics Review<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Kamila Sommer and Paul Sullivan, \u201cImplications of US Tax Policy for House Prices, Rents, and Homeownership,\u201d&nbsp;<\/span><em><span data-preserver-spaces=\"true\">American Economics Review<\/span><\/em><span data-preserver-spaces=\"true\">, Pg. 265<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What About Real Estate Investors?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Some might be concerned that removing the mortgage interest deduction would severely affect real estate investors. After all, the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-taxes-deductions\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">tax advantages<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of owning real estate are one of the biggest boons to property ownership there is. Fortunately, this is not an issue with real estate investments.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As the IRS website&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/tips-on-rental-real-estate-income-deductions-and-recordkeeping\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">states<\/span><\/a><span data-preserver-spaces=\"true\">, \u201cYou can deduct the ordinary and necessary expenses for managing, conserving and maintaining your rental property\u2026 Necessary expenses&nbsp;<\/span><span data-preserver-spaces=\"true\">are those that<\/span><span data-preserver-spaces=\"true\">&nbsp;are deemed appropriate, such as interest, taxes, advertising, maintenance, utilities&nbsp;<\/span><span data-preserver-spaces=\"true\">and<\/span><span data-preserver-spaces=\"true\">&nbsp;insurance.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There\u2019s no $750,000 limit, either. As the National Association of Realtors&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/rental-properties\/rental-property-tax-deductions\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">points out<\/span><\/a><span data-preserver-spaces=\"true\">, \u201c[U]nlike those who itemize mortgage interest deductions, rental property owners are not subject to a limit on the amount of the debt.\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And why should there be? Real estate investment is a business, and every other&nbsp;<\/span><span data-preserver-spaces=\"true\">business<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">is allowed to<\/span><span data-preserver-spaces=\"true\">&nbsp;deduct their&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.investopedia.com\/terms\/b\/business-interest-expense.asp\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">business interest expense<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;from their taxable income (with some exceptions). It would be completely unfair to single out real estate investment as an exception.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Indeed, that is&nbsp;<\/span><span data-preserver-spaces=\"true\">probably<\/span><span data-preserver-spaces=\"true\">&nbsp;the best case&nbsp;<\/span><span data-preserver-spaces=\"true\">to make<\/span><span data-preserver-spaces=\"true\">&nbsp;for why a mortgage interest deduction for homeowners should stay on the books: Why should real estate investors benefit from a tax deduction that homeowners do not?<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For this reason and the (very) marginal boon it grants to the housing market, the National Association of Realtors has \u201c<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/advocacy-58\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">strongly opposed<\/span><\/a><span data-preserver-spaces=\"true\">\u201d any attempt to reduce or eliminate it.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But<\/span><span data-preserver-spaces=\"true\">&nbsp;as noted, the cost to the real estate market would be tiny if it were to go.<\/span><span data-preserver-spaces=\"true\">&nbsp;Furthermore, the homeowners who tended to be affected would be the wealthier among us, and even for them, only to a slight degree.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If we want to subsidize homeownership,<\/span><span data-preserver-spaces=\"true\">&nbsp;tax credits for lower-income people&nbsp;<\/span><span data-preserver-spaces=\"true\">would<\/span><span data-preserver-spaces=\"true\">&nbsp;make far more sense.<\/span><span data-preserver-spaces=\"true\">&nbsp;The mortgage interest deduction has proven&nbsp;<\/span><span data-preserver-spaces=\"true\">to be an<\/span><span data-preserver-spaces=\"true\">&nbsp;ineffective and mostly irrelevant tool to aid the housing market. For most of us,&nbsp;<\/span><span data-preserver-spaces=\"true\">it would not be missed<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_7f7292837477ecbe59206ac54e85f624\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_a92a46ca6d5d7a63ce664c6a35d38a4b\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<div id=button-custom-event-block_805ea9c06afbca580d834294390a4d18 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/mortgage-interest-deduction-is-not-a-fight-worth-fighting&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/mortgage-interest-deduction-is-not-a-fight-worth-fighting&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>After the National Association of Realtors agreed&nbsp;to pay $418 million&nbsp;and eliminate the 6% commission to settle the lawsuit against it, attention in some quarters is now&nbsp;being turned&nbsp;to&nbsp;the mortgage interest deduction.&nbsp; [&hellip;]<\/p>\n","protected":false},"author":1689,"featured_media":171427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4433],"tags":[],"class_list":["post-171421","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1689"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=171421"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171421\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/171427"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=171421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=171421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=171421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}