The Senate-Proposed Tax Plan's Impact on the Mortgage Interest Deduction
Currently, 44 percent of U.S. homes are valuable enough to encourage itemizing and taking the mortgage interest deduction rather than the standard deduction. Under the new House and Senate tax proposals, that drops to between 7 and 12 percent.
Zillow’s analysis shows that about 51 percent of homes in Cook County, Illinois today are worth enough to take the mortgage interest deduction instead of the standard deduction. Under the House bill, only 11 percent of homes in the Chicago area are valued high enough for the owner to get a better deal by taking MID, and under the Senate bill, only 4 percent.
Increasing the standard deduction and limiting or eliminating key itemized deductions – including the mortgage interest deduction (MID), property tax deduction and deductions for state and local taxes (SALT) – make it very likely many individual filers may choose not to itemize.