Should renters have gotten a tax break in the mortgage bailout?

[dsc]

As a renter I get no tax break at all while if I bought a house I would be able to write a huge amount of my mortgage payment off of my taxes. My proposal, renters should get to write off a third of their rent off their taxes. It would be a large break but would go mostly to lower income people who would likely spend it. Stimulus anyone?

[ananda]

1. YES.

Here's why. We're part of the reason
there's any economy left at all.

[FLDCVADem]

6. For most renters, I don't see how that would help

Unless your rent is ~$2700/month, you would still be better off taking the standard deduction.

This is assuming my math is correct, which is always suspect after I've had to shovel snow. :)

[dsc]

11. that is assuming no other deductions

Since I don't have that base a mortgage would provide me I don't even bother keeping track of charitable donations and other potential deductions as I know I don't have a Pope's prayer of making enough deductions to write off.

[MercutioATC]

2. Just so you know, it's not "a huge amount" of your mortgage payment.

It's a percentage of your mortgage interest...which isn't a huge amount.

[dsc]

4. In the first years nearly your entire payment is interest

then it goes down.

[MercutioATC]

7. Ok, so for 5 years of a 30-year mortgage, it's a substantial amount.

By the end, it's close to nothing.

My point was that letting renters deduct 1/3 of their rent payments doesn't equate to a mortgage interest deduction.

[MercutioATC]

9. .

.

[MercutioATC]

10. .

.

[GoCubsGo]

13. This year, it didn't even make a difference for me

I'm about half-way into a 15-year mortgage. I wound up taking the standard "personal deduction" this year, because it was bigger than my itemized deductions--even with taxes and mortgage interest. Granted, my income was way down last year, thanks to only working 5 months at half the hourly wages of what I was making before I got laid off.

[Xithras]

23. Unless you have an Interest Only loan.

In which case, the whole thing qualifies.

That was one of the selling points of I/O loans back when the boom was still booming; "With an interest only loan, you can deduct your mortgage payment on your taxes every year!"

[stray cat]

3. If you are a responsible renter who didn't jump into a mortgage you couldn't afford

you get nothing. And at least on the coasts one can make 100,000 per year and not be able to afford the 60,000 down on a one br condo.

[snappyturtle]

5. Yes, but since I find that highly unlikely, it would be nice if your landlord

recognized your contribution to the economy and one, either lowered the rent or two, shared his tax break among his renters. In MN renters are given a break on State income taxes...their rent in relation to their salaries. I always thought that was a good thing. imho

[Uben]

20. I give long term tenants 1 mo free rent

If I have tenants in my houses that have been good tenants for two yrs+, I give them December's rent free! My homes are paid for, so I have the luxury of doing this. I am not a Grinch, I am not greedy, and I find it good business as it keeps them in my homes. Most of them are young couples who can sure use the money at Christmas. I have had tenants openly weep when I tell them their rent for December is free, because they didn't know where they were going to scrape up Christmas money. I tell them that as long as they continue to pay on time and take care of the property as they have, their rent every December is free. And, my rents are not high by any means, $550/mo for a two bedroom frame homes on a large fenced lots. Needless to say, my turnover rate is low. That one month's rent is usually less than the costs of repairs for a one-year tenancy by a bad renter, so it helps us both out.

[snappyturtle]

21. That's wonderful! Lucky renters! It makes good business sense too. nt

[dsc]

36. that is really cool

I wish my landlord would give me August free (I don't get paid over the summer so Aug is my rough month)

[Rabrrrrrr]

8. They should, but won't, because renteres, singles, and childless people don't count

except as revenue sources to pay for other people's stuff.

[MercutioATC]

12. Actually, no they shouldn't.

The mortgage interest deduction is a piece of social engineering. It's designed to encourage home ownership. Giving renters a similar deduction completely eliminates the incentive.

[dsc]

14. that is assuming encouraging home ownership is a good thing

Studies are showing now that home ownership doesn't do the things it has been promising to.

[bettyellen]

18. and it's very wasteful....also ur taxes are disproportinately spent on suburban infrastructure

[Kansas Wyatt]

24. 'designed to encourage home ownership'

So DEVELOPERS can sell more units in their cookie cutter cramped shoddy built subdivisions, and make millions.

That is the bottom line.

[napi21]

15. I understand you wanting a piece of the action, but YOU don't pay

the interest, your landlord does.

The other thing you have to realize is that it's the interest you get to deduct from your taxes. Think about that. If you pay $6,000/yr in interest, you get to reduce your taxable income by that amount, which, depending on your tax bracket would amount to $1,680 in a 28% bracket. So you spent $6,000 to save $1,600????

I know each of us hunt for deductions at tax time, but mtg. & interest isn't the great deal it's cracked up to be. In a down housing market, it;s no deal at all.

[tonycinla]

16. Higher rents?

It is very possible that once all the smoke clears rents will go up.Many landlords are going to be paying higher income taxes .A change in the capital gains tax is going to make owning rental properties less profitable.There may be a lot more people renting because they lost their home in foreclosure and will now be renters ,thus effecting the law of supply and demand.In my area real estate taxes have gone up dramatically in the last few years.These landlords/businessmen realize all of this and will certainly raise rents if the market will bear it.

[aikoaiko]

17. For a small 100k mortgage its not that much and property taxes and maintenance can balance it out

[spanone]

19. i own a house, paid it off, i get no break either...maybe i should get a reward

[Earth_First]

22. Should renters begin to pay school taxes? n/t

[JANdad]

25. Oh you are absolutley right...

We pay no taxes when we rent. The LL pays those taxes out of his own pocket out of the goodness of his heart...









































Dipshit!

[Lars39]

27. Renter *do* pay school taxes....taxes are figured into the rent.

[dysfunctional press]

30. BULLSHIT.

the main thing that's figured into rent is what the market will bear.

when i was a landlord, the ONLY thing that determined our rent was how much we thought people would pay, based on the other rents in the area.

when the taxes went up, the rent didn't.

[Lars39]

31. So you just pulled the taxes out of your ass or what?

[dysfunctional press]

40. actually out of my bank account...but it sounds like you should get a wallet.

that money-in-the-ass thing sounds pretty unsanitary.

[whoneedstickets]

46. Yeah, the current market means I eat a small percentage of

the mortgage payment each month -- the rent I could get was a bit less than the monthly payment -- and not worth the effort to haggle over. So renters sometimes get a break.

[dsc]

33. I do

Salaries are paid by the state here out of income and sales taxes and the county levies a property tax on cars.

[dysfunctional press]

41. i'd like to see them do that here...

if childless property owners can support the schools, so can others.

[Fleshdancer]

26. I don't need a tax cut, but I wish there was a freeze on raising rent

The rent in my apartment is getting too high so I'll have to find somewhere else once my lease is up because I know it will be raised again.

[dysfunctional press]

42. as soon as there's a freeze on landlord expenses, that would be feasible.

nt

[dysfunctional press]

28. i'm a home-owner who's not getting a tax break either...why should renters?

if they want a tax-break- they can buy a house.

[sandnsea]

29. It's a deductible down payment, not mortgage

The mortgage interest write-off is the same as always. The down payment assistance isn't new, the waiver to pay it back has been lifted is all.

So go buy a house already and take advantage of the credit while you can.

[dsc]

32. that wasn't the provision I was referring to

I was referring to the massive bailout of preexisting mortgages.

[Zhade]

45. Some of us CAN'T save the money for a down payment because of the high rent!

NT!

[sandnsea]

49. This is a credit to cover the down payment

If you have good credit and can afford a mortgage in your area, there are down payment programs to help and this is one of them.

[Thickasabrick]

34. No, but I do think they should allow interest deductions for autos and

credit cards....especially with the rates being so high now. This would benefit low income people because unfortunately, they are the ones who have to pay such higher interest rates for those things.

[county worker]

35. There is no huge tax write off. You take your interest deduction and add any other deductions

and compare them to the standard deduction. If your itemized deductions are greater you take that. But that reduces your taxable income. Then you figure your tax. It is not like you pay $10,000 in interest and you get $10,000 back in tax relief.


Also many people using itemized deductions get hit with the AMT.

You want to compare taxes, compare your tax % of your income. Yours is probably lower than someone with itemized deductions.

[dsc]

38. I never said it was

but if you have 10,000 in interest you already meet your standard deduction plus some so you get to write off everything else you do.

[county worker]

51. Like I said, you don't write off anything. Deductions are used to reduce your

taxable income. Then you figure the tax. It is not a dollar for dollar reduction in taxes. Also the AMT comes into play if your deductions lower your taxable income to the point that you owe little tax. It is based on your income before deductions.

The term "write off" is very misleading. No one writes off their expenses dollar for dollar.

The only real way to compare taxes is to calculate the percentage of your income that goes to pay taxes and someone else's then compare rates.

[ecstatic]

37. No. nt

[Milo_Bloom]

39. YES!!

I believe that 50% of money paid in rent on a primary residence should be tax deductable.

[Zhade]

43. FUCK YES.

WE didn't help fuck up the economy!

[1]

44. should they have? many answers. did they? no...

i don't understand this post...

[shugah]

47. yes

i would like to see everyone who thinks the stimulus is unfair to get the same or equivalent amount of stimulus. hell, i'd have rather seen every taxpayer get $50k or whatever the amount would have been if the bank bailouts had been divied up that way instead - as long as the people who are too poor to be taxed also got the same or equivalent.

mostly, however, i'd like to see JOBS.

i really see jobs (with decent wages) as the solution to all our woes.

[Mr. Hyde]

48. Why not just throw wads of $100 bills out a helicopter while we're at it?

That'll fix our economy good.

[backwoodsbob]

50. I played by the rules and have payed my home off

should I get a break too?

Exactly how much money are we going to hand out?

It's getting up into the trillions..a trillion here,a trillion there...pretty soon it adds up to real money