Here’s our bold idea to get residential real estate moving again: Let homeowners who sell their homes at a loss to deduct the loss from their income tax returns.
There are millions of Americans who want to sell their homes, but can’t or won’t lower the prices. We all know that real estate prices must come down.
The tax deduction plan is simple (somehow saying simple and tax deduction in the same sentence sounds like an oxy-moron). If a homeowner sells their home below their “tax-base” purchase price, allow a once-in-a-lifetime deduction for the loss against their income taxes. Loss carry-forwards would be good. Retroactive would be better. I could live with a cap on deductions.
Sellers get motivated/an incentive to sell. Buyers get a new home at a price that is more realistic. And the world starts moving again.
We might even be able to pay for the whole thing through a bump up in interest rates.
That’s our simple Labor Day action plan proposal for getting the economy going again. Now, let’s go get the barbeque going.