[quote=Nor-LA-SD-guy]All this would do is put more money into the hands of people who invest in cash flow rentals,

OK more people would probably rent instead of buy and that may drive down property price for a while, but in the end it will just put more money into cash flow rental investors.

Choose your poison …[/quote]

Other than changing the principle residence pricing dynamics, this would have little effect on rental properties (save for single family homes as rentals). These proposals do not change any rules with regards to deductibility of interest on rental properties, only on home mortgages. (completely different tax laws.)

I would propose that completely doing away with the home mortgage deduction would provide price stability to the market. Interest rates and the availablity of money would have significantly less influence on prices if potential tax savings are removed from the calculation. Fewer variables would produce a purer supply/demand dynamic in pricing. Government policy would no longer subsidize home ownership.

Again, keep in mind, this would have no effect on rental properties. Interest on rental property mortgages is a business deduction, not a personal deduction.