New Jersey Realtors Oppose Obama’s Plan

EDISON — The New Jersey Association of Realtors (NJAR) Friday, Feb. 27 said President Obama’s budget proposal to reduce the amount of mortgage tax deductibility for families earning over $250,000 will negatively impact housing and economic recovery efforts in high cost areas like New Jersey.
“While New Jersey enjoys the second highest household median income in the nation, our taxpayers also bear the heaviest state and local tax burden in the country,” said NJAR Executive Vice President Jarrod Grasso in a release. “In a high cost state like ours, reducing the amount of mortgage interest a family can deduct from their taxes will have a devastating impact on housing recovery efforts and limit many people’s ability to achieve the dream of homeownership.”
According to the release, President Obama’s budget proposal would limit the tax rate at which high-income taxpayers, those whose family income is $250,000 ($200,000 for singles) or more, to 28 percent for itemized deductions. Even though the proposal would apply only to households earning $250,000 or more, home prices across the board would fall as home buyers discount the value of the deduction in their purchase offers. This will lead to a drop in all home prices because a fall in home prices at the top end will eventually filter down to lower priced homes.
“At a time when both our federal and state governments are grappling with massive budget deficits and attempting to jumpstart our economy, this is exactly the wrong message to be sending,” added Grasso. “Discussing President Obama’s ill-advised plan will be at the top of our agenda when NJAR’s leadership team heads to Washington, D.C. next week. We are hopeful New Jersey’s congressional delegation will see how this approach will undue the work they have already done to revitalize the housing market and work to change it.”
The NJAR leadership team will visit Capitol Hill in Washington, D.C. next week to discuss key issues that have an impact on property owners and the real estate industry, including the proposed cut in the mortgage interest deduction.
NJAR President Diane Dilzell (Bedminster), President-Elect Judy Appleby (Seaside Park), First Vice President Allan “Dutch” Dechert (Avalon), Immediate Past President Drew Fishman (Northfield), Executive Vice President Jarrod Grasso (Edison), and NJAR staff will participate in the meetings with New Jersey’s congressional and senate delegations.
During the meetings, NJAR leadership will discuss a permanent ban on national banks and financial holding company subsidiaries engaging in real estate brokerage, leasing and management powers. They will encourage lawmakers to enact H.R. 111 “The Community Choice in Real Estate Act.” Additionally, NJAR® will call on lawmakers to continue providing flood insurance for communities in flood zones through the National Flood Insurance Program. NJAR® will also discuss efforts to restructure Fannie Mae and Freddie Mac.