Maryland Governor Martin O’Malley recently proposed a budget (Budget Reconciliation and Financing Act of 2012) that, if passed, would itemize deductions, including mortgage deduction and the deduction for property taxes. These two items account for 70% of the itemized deductions Marylanders take off their state tax returns.
More than 1 million Marylanders took advantage of the mortgage-interest deduction in 2008 (the last year figures were available).
According to the Maryland Association of REALTORS Action Alert about the reduction in tax deduction,
“Under the proposal, if a Maryland taxpayer’s federal adjusted gross income exceeds $100,000; single taxpayer’s itemized deductions would decrease by 10% when calculating Maryland taxable income – that’s an INCREASE in your Maryland taxable base! Taxpayers with adjusted gross income over $200,000 would see their deductions decrease by 20%!”
What This Means
- House bill 87/SB 152 would make Maryland the first state to reduce the mortgage interest deduction.
- Despite low interest rates and low home prices, potential Maryland homebuyers are still not buying homes.
- House bill 87/SB 152 could potentially deter some potential homeowners, further delaying real estate recovery in Maryland.
Senate Bill 152 is scheduled for a hearing before the Senate Budget and Taxation committee on Wednesday, February 29. The companion bill, House Bill 87, is scheduled to be heard by the House Appropriations committee on Thursday, March 1.
In response to the proposed bill, the Maryland Association of Realtors organized a rally outside the General Assembly. The rally was expected to draw over 400 people.
If you have any questions, please contact the Maryland real estate insurance experts at Colony Title Associates by calling 410 884-1160 or visit ColonyTitle.com today!
About Colony Title Associates:
Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings per year in the central Maryland area. The founder Tee Tillman has over 23 years experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers. Colony is the preferred choice for many real estate brokers in the area.
Colony Title specializes in real estate title insurance, real estate settlement services, and real estate closings in Baltimore, Columbia, Maryland, Washington DC, and Virginia. Our staff consists of licensed Title Insurance Agents, Real Estate Agents, Settlement Processors, & Attorneys to handle all of your real estate needs.
Tags: Budget Reconciliation and Financing Act of 2012, buying homes, House Bill 87, House Bill 87/SB 152, itemized deductions, Maryland Association of REALTORS, Maryland Governor Martin O’Malley, Maryland homebuyers, Maryland taxable base, mortgage deduction, mortgage interest deduction, Senate Bill 152