House Tax Bill Hits Real Estate

Delete All Amendment HF2323

On Monday this week, the Minnesota House of Representatives Tax Committee released a "delete all amendment" to HF2323 and added provisions that are negative for real estate in the Omnibus Tax Bill.

The DFL House Tax Plan raises revenue by cutting a number of income tax deductions. Of significant concern to Minnesota REALTORS® and homeowners, the DFL House plan eliminates two major real estate tax deductions: the Mortgage Interest Deduction and Real Estate Property Taxes. The bill also eliminates provisions of the Relative Homestead Tax.

Elimination of Mortgage Interest Deduction (MID)– a feature of the tax code since 1933, the MID has helped numerous generations achieve the American Dream of owning a home. A significant public policy objective for decades, homeownership stabilizes families, neighborhoods and communities. The House DFL Tax Bill eliminates the MID for homeowners and replaces it with a "housing credit" for qualified homeowners.

Real Estate Property Tax Deductibility - This public policy provision has been included in the tax code since 1933 and allows taxpayers to deduct property taxes paid from their income. The House DFL Tax Bill eliminates the deductibility of real estate property taxes at a time when local property taxes continue to increase faster than Minnesotan’s income.

Relative Homestead – If you own identical houses, with identical values, with identical tax rates you would assume you would pay identical taxes – Right? Not if the House DFL Tax Bill becomes law.

This new law changes so many things and your pocketbook is one of them. If you do not agree with this law call your legislator and let them know your thoughts on it.

Here is a video from Chris Galler with the Minnesota Association of Realtors on the HF2323 Tax Bill: