FWIW, only the interest is deductible, not the entire payment.

I agree with the sentiment though. The realtors have arguably the most effective lobbying efforts, and to be able to tie their industry in with the "American Dream" has been very effective.

I was out in DC earlier this year speaking with my congressional representatives about some changes to the bankruptcy code. We were working with a lobbyist who said something along the lines of "everybody knows when the realtors are in town. Nobody tries to get meetings that week because they have such a great mobilization effort, everyone gets booked up."

Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with. And if you know anything about Western society, home ownership creates stable societies—that’s why ownership is encouraged.

>Relax. You’re not subsidizing anyone. Homeowners pay a larger share than renters to begin with.

As someone who knows many landlords: Completely wrong.

They buy properties with a loan. They pay interest on that loan. The money the renter pays goes towards the interest payments. Renters are essentially buying the properties for the owners.

And landlords can keep deducting it, no matter how many properties. Homeowners can deduct only for two houses. And renters deduct none of it. The landlords literally deduct what their tenants are paying (interest, which is part of their rent).

And not sure about your other comment, but rarely do renters of similar size houses/apartments pay less than homeowners. As an example, my house I bought only a few years ago: I pay just a little more than some 3 bedroom apartments (which are much smaller than my house). Most 3 bedroom apartments in desirable areas in my city pay more in rent than my monthly payment.

And then with all the deductions I was getting, I was effectively paying less than most 2 bedroom apartments, and some single bedroom apartments. And if I take into account the amount going towards the principle, I'm paying about the same as most single bedroom apartments in my area.

I did not put in a huge down payment. Less than 20%, in fact.

Businesses generally get to deduct interest on loans used for the business, so landlords would probably be able to deduct mortgage interest under that even if there was no specific mortgage deduction in the tax code.

Accordingly, I'm not sure it makes sense to discuss landlords when discussing the mortgage interest deduction.

As a point of comparison, Massachusetts does not have a mortgage interest deduction for individual homeowners, but for landlords income is computed using the federal Schedule E with only a few state-specific adjustments, so mortgage interest is still deductible. Of course landlords also pay tax on their rental income (minus expenses of course), while individual homeowners don't have to pay any tax on imputed rent.

Uhhh, the topic was about taxes. The homeowner demographic is statistically a higher earner than the renter demographic, thus pay more taxes.

The rationale is to encourage home ownership, because that gives people an incentive to care about upkeep and the community. It's hard to create good neighborhoods with renters who can just pack up and leave.

Mortgage interest and property taxes are costs on top of the actual cost of the house. My mortgage itself isn't tax deductible.

It's still a concession to homeowners that renters don't get.

We want taxes to be fair, no?

Not really. Trying to make taxes fit some arbitrary definition of fair is most of the problem. We should be looking at macro effects on our whole economy when making decisions on taxes.

Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?!

> Ok, lets play this game. From now on its renters that have to pay 50% of the property tax. No? But you get to deduct it! an extra deduction for you! whats not to like?!

Renters already are paying a piece of the property tax. It's built into the rent. They just can't deduct it.

Ok that may be true but why should they be allowed to deduct it? They are not a business owner (unlike the landlord). Its like allowing people to deduct 10% of everything they buy from Amazon because they are paying a part of Amazon’s warehousing costs.

I'm not advocating for renters to be able to deduct a piece of the underlying property tax. I don't think it makes sense to have property tax as a federal deduction at all.

In general, I'm not sure how great it is that we favor home ownership over renting in our tax policy. My bigger issue is being able to deduct mortgage interest but not rent. Mortgage interest is essentially rent on money, so I've always thought it'd be fair to make rent (or a percentage of it at least) deductible as well. Or, even better, eliminate the mortgage interest deduction entirely.

Full disclosure, I'm a homeowner. Fuller disclosure, my home is paid off, so it's easy for me to say these deductions shouldn't exist. I would gladly give up the property tax deduction if that additional revenue was used for something other than cutting taxes for the wealthy, though.

OK, I see your point with mortgage interest interested being deductible.

Renters are already paying all of the property tax. The expenses for any business (including being a landlord) are, in the long term, paid by the customers. Otherwise the business becomes insolvent.

I concede renters may be paying a part of it.

However if a landlord is like a business owner, and property tax is a business expense, why should they not be allowed to deduct it (just like any other business expense)?

Amazon has expenses too related to storing products in warehouses, which they can deduct. Part of that cost is priced into the product. So in theory, customers should be able to deduct a portion of every product they buy from Amazon?

Just my opinion, but society benefits from having manageable costs of living. I acknowledge that landlords have a business to run, but we also have a policy favoring ownership. Not allowing a property tax or non-occupied mortgage interest deduction raises the costs of being a landlord, disfavoring that activity a bit from a policy perspective. That, in turn, may lower housing costs (and increase owner-occupation of primary residences) by taking some landlords out of that market.

We built a broad middle class by favoring home ownership, allowing regular folks to build wealth in the form of their primary residence. I think we need to get back to that, and that does mean making policy decisions that eats into the margins of landlords.

> allowing regular folks to build wealth in the form of their primary residence

Sometimes that's true, sometimes it isn't. Sometimes people wind up with underwater mortgages, rather than building wealth.

I don't think other business expenses should be deductible either, as that incentivizes inefficient businesses.

I would favor eliminating all business deductions, combined with lowering the tax rate enough to make the change revenue neutral.

Because the person that owns the property you rent is receiving those benefits.