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grundar t1_it9n2la wrote

Reply to comment by marigolds6 in Many countries have a "hidden welfare state" for incumbent homeowners, as governments subsidize homeowners through the tax system. The homeownership welfare state is strongest in the US and other Anglophone countries, but weakest in the Scandinavian countries. by smurfyjenkins

> When you pay rent, your landlord pays income tax on that rent you pay. A homeowner pays no tax on the imputed rental income of the house

Sure, but the homeowner also does not get to deduct operating expenses or depreciation in the way a landlord does.

Looking only at imputed rent as untaxed income without looking at building maintenance as offsetting expenses is fundamentally misrepresenting the comparison between homeowners and landlord+renter pairs.

> It's down to under 18% of home owners now who can actually take the deduction and lower their taxes.

Yup, and even that 18% are seeing a much smaller benefit than before.

Previously, an expensive ($1.5M) house could increase overall deductions by $40k+:

    • $40k/yr for mortgage interest
    • $15k/yr for real estate tax
    • $13k for standard deduction
      Net: +$42k

Now, even an expensive house like that might get 1/10th the benefit from itemizing:

    • $25k/yr for mortgage interest (capped)
    • $5k for real estate tax ($5k space already filled by state income tax)
    • $26k for standard deduction
      Net: +$4k

The tax changes in 2018 more-or-less killed the mortgage interest deduction in the USA. (Which isn't necessarily a bad thing.)

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