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Research report

Options to Reform the Deduction for Home Mortgage Interest

Chenxi Lu, Joseph Rosenberg, Eric Toder
December 8, 2015
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Abstract

Taxpayers can currently deduct interest on up to $1 million in acquisition debt used to buy, build, or improve their primary residence or a second designated residence. They can also deduct interest on up to $100,000 in home equity loans or other loans secured by their properties, regardless of the purpose of loans. This brief considers three proposals for restructuring the mortgage interest deduction: replacing the deduction with a 15 percent non-refundable interest credit, reducing the ceiling on debt eligible for an interest subsidy to $500,000, and combining the substitution of the credit for the deduction with the reduced limit on the interest subsidy.

Research Area

Individual Taxes Homeownership
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Meet the Experts

  • Chenxi Lu
    Research Associate
  • Joseph Rosenberg
    Senior Research Associate
  • Eric Toder
    Institute Fellow and Codirector, Tax Policy Center
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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