The Silicon Valley Association of REALTORS® (SILVAR) hailed a rebuttal by the California Association of REALTORS® (C.A.R.) to an opinion editorial piece advocating the elimination of the mortgage interest deduction (MID).

“We are happy that California Association of REALTORS® President Don Faught was able to put the facts out there about the importance of the mortgage interest deduction to all homeowners, especially low- and middle-class families,” said SILVAR President Carolyn Miller.

Doyle McManus, a columnist with the Los Angeles Times, recently wrote an opinion editorial advocating the elimination of the MID. C.A.R. President Don Faught submitted a letter to the editor refuting the op-ed piece, questioning supporting a tax measure that would put a burden on lower- and middle-class families that can least afford it.

In his letter, Faught explained if the MID is eliminated, it would cost the average California taxpayer $3,940 annually, a substantial amount for those who need it the most. In California, 59 percent of taxpayers who claimed this deduction in 2010 earned less than $100,000 a year. The amount is considered not high income in California because home prices are among the highest in the nation.

“Eliminating the deduction would mean fewer home sales, not to mention a drop in other purchases that typically accompany a home sale such as furniture and other retail purchases. Already struggling local governments would see tax revenues fall, and since housing is widely regarded as a key economic driver, our country could be driven back to recession,” wrote Faught.

The MID allows an individual to deduct mortgage interest paid on mortgage debt of up to $1 million. The ability to deduct the interest paid on a mortgage can translate into significant savings at tax time.

Faught referred to a recent C.A.R. survey that found nearly eight in 10 home buyers said the mortgage interest and property tax deductions were “extremely important” in their decision to purchase a home. A Pew Research Center study last year also found 80 percent of Americans believe buying a home is the best long-term investment they can make.

“After all, renting is not the American Dream; homeownership is. For many, the mortgage interest deduction can mean the difference between attaining that dream or not,” Faught’s letter concluded.

Miller said REALTORS® will continue to defend the MID. “The mortgage interest deduction is not a loophole. It is a fundamental building block of equity for homeowners. For aspiring homeowners who don’t have hundreds of thousands of dollars in savings to buy a home outright, tax benefits like the mortgage interest deduction help them begin building their future through homeownership,” said Miller.

See LA Times Op-Ed