Annapolis -- Under Governor O'Malley's proposed budget, many Maryland homeowners will face a severe cap on their mortgage interest deduction.
The plan will decrease the most important tax deduction that homeowners receive and will make it even harder to own a home in Maryland.
The proposal is part of the Governor's budget bill, (BRFA- HB 87/SB 152) which seeks to balance the state budget in part by reducing the amount of deductions on Marylanders who make over $100,000.
O'Malley has targeted these taxpayers and calls them "high income earners." Their itemized deductions would decrease by 10%. If you make over $200,000 yearly, your deductions would decrease by 20%.
Marylanders would face a decrease in itemized tax deductions at a time when one out of every five homes is underwater or has lost significant equity.
For nearly 100 years, the tax code has protected mortgage interest deductibility. Mortgage interest and property taxes account for almost 70% of total itemized deductions in Maryland and if passed, it would further harm Maryland's housing market, which is struggling to recover. The Maryland housing market is still fragile and this would keep potential buyers sitting on the sidelines.
Additionally, there is a possibility that the Administration will continue to reduce this important tax benefit in the future.
We urge Governor O'Malley and other members of the Maryland General Assembly to rethink this detrimental proposal.
If you want to speak out, contact your State legislator at the link below.