The real estate industry defends the existing homeowner tax breaks as a bedrock of the American Dream. But the tax panel looked at countries that don’t allow mortgage interest deductions, among them Canada, Britain and Australia, and found rates of homeownership close to the 69 percent figure for the United States. The panel would replace today’s mortgage interest deduction with a far more modest tax credit of 15 percent of mortgage interest actually paid. What’s more, there’d be a cap on the amount of a loan eligible for the credit (up to $412,000 in highly expensive markets). Second homes would be totally ineligible.

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