Reply #9: Deduction of mortgage interest could stand some fine-tuning [View All]

[gratuitous]

I don't know that interest deductibility is the make-or-break decision point for anyone looking to buy a home. It's a nice perk come tax time, but it doesn't affect a person's day-to-day existence over the course of the year. Perhaps if the deduction was limited to just one property per return? Ordinary folks would still get the full benefit of the deduction, but persons paying mortgages on two, three or more houses, either for personal use or as rental income properties, wouldn't get the deduction except for one house, presumably the one with the highest mortgage.

This could have the unintended consequence of raising monthly rents, though it probably wouldn't be a substantial amount per month, unless a landlord was a real son of a snake, and used it as justification for really jacking up rents. But that is one area where free market rules might enforce conformity, where a landlord who raised rents substantially would have difficulty finding people to rent their properties.

Lots of angles to consider, but a review of this tax policy might be a good thing even if nothing happens.