We're Watching Your Back
We're Watching Your Back
As the fiscal cliff debate raged, the National Association of REALTORS® was intent on not adding to the confusion by speculating on what might happen given one scenario or another. Yet, I can’t overstate how much work was happening behind the scenes to minimize any potential impact on real estate.
The result was that on Jan. 2, the same day the House passed the bill to avert the fiscal cliff, we were providing information to all of our state and local associations—and to you via REALTOR.org—about specific provisions of the bill that affected real estate.
Stay up-to-date on advocacy efforts on NAR's political advocacy page.
While the debate was underway, we felt it was a good time to reaffirm our support for the mortgage interest deduction. Although discussions to limit the MID never progressed to an actual proposal, we wanted to remind lawmakers that the MID benefits primarily middle-income families, and any change to it could harm housing and the economy as a whole. The Dec. 3 Call for Action generated record levels of responses from REALTORS®. You let Congress know loud and clear that we’d be vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.
While the legislation that was signed into law in January did not affect the MID, its passage represents a step in a continuing effort by NAR to protect the ability of American families to own a home. The legislation also extended several tax measures of critical importance to our businesses:
- Mortgage cancellation relief is extended for another year. Households that have mortgage debt forgiven by a lender in 2013 as a result of a modification, short sale, or foreclosure will not have to pay tax on the amount forgiven.
- Mortgage insurance premiums remain deductible. Tax filers making less than $110,000 who pay for mortgage insurance can deduct the cost of their premiums on their 2012 and 2013 tax returns.
- 15-year straight-line cost recovery on leasehold improvements is extended. For qualified leasehold improvements on commercial properties, 15-year depreciation is extended through 2013 and made retroactive to cover 2012.
- Energy efficiency tax credit remains in force. The 10 percent tax credit, up to $500, for home owners who make energy efficiency improvements to an existing home is extended through 2013 and made retroactive to cover 2012.
Debate will continue in the coming months on long-term solutions to the issues left unresolved by the fiscal cliff bill. As Congress addresses those issues and broader tax reform, you can bet that we’ll continue our vigilance on behalf of REALTORS® and property owners across the country.