Mortgage plan: Not such a good idea, either
In its Aug. 11 column “Mortgage tax proposal not such a bad idea,” I agree with columnist Jason Gibbs that doubling the standard deduction will benefit many more taxpayers, but the current and future homeowner will suffer. Everyone with a mortgage will also suffer.
The American dream of home ownership will become more expensive not only to first-time buyers, but to those current homeowners and to those who try to move up to a larger home.
In the Santa Clarita Valley, the average home cost is approximately $500,000. If anyone can save the 20 percent down payment of $100,000, that person will have a mortgage of $400,000. Payments on a $400,000 mortgage at 4.5 percent will be $2,027 per month.
Property tax will be 1.25 percent or $521 per month. Interest for one year is $18,000 plus property tax of $6,250 for the first year, this totals $24,250.
The doubled standard deduction will be $25,400 for married taxpayers (what about the other itemized deductions, including California income taxes?).
Oh, yes, what about that pesky alternative minimum tax that would now disallow all property and state income tax deductions (if you earn enough to afford these payments you will most likely be subject to the alternative minimum tax).
How does this encourage anyone to become a homeowner? Whatever will happen to the American dream of homeownership? What a great future for our children and grandchildren.
Aran H. Dokovna