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■ Audit all laws , rules , regulations , and processes to eliminate unnecessary delays and anything that inflicts unnecessary or redundant costs on land development and home building
■ Adopt a cooperative attitude that promotes a positive working partnership between the government and entities working to deliver a valuable and much-needed taxable ( revenuegenerating ) asset to their citizens .
2 : PROPERTY TAX EXEMPTION
■ Provide new tax exemption : To increase home affordability , state , city , school and other property taxing entities could issue tax exemptions for a specified number of years , especially for first-time home buyers . For example , a five-year tax exemption would start with an initial reduction of 30 percent for years one , two , and three , then decrease to 20 percent for year four , a ten percent decrease for year five , and a full tax assessment beginning in year six . This would provide remarkable relief for new homeowners and incentivize builders to build more affordable housing in the same way electric car manufacturers have been able to make more cars because of state and federal tax incentives for buyers . While electric vehicle incentives increased our tax burden with no long-term benefit , this would do the opposite .
3 : A DIFFERENT INTEREST RATE REDUCTION
■ Give mortgage income a break : The mortgage payment typically is a homeowner ’ s largest expense . Reducing that expense makes homes more affordable
This approach would be similar to how municipal bonds work . Interest earned on municipal bonds is generally exempt from federal income tax and sometimes state and local taxes . This tax exemption makes municipal bonds an attractive investment because investors keep more of their interest earnings .
If federal and state governments waived income taxes on mortgage income ( as they do for municipal bonds ), it could lower mortgage interest rates for home buyers by an estimated two percent and substantially increase the affordability of all homes , not just new homes .
Don ’ t punish : incentivize
Let ’ s face it : Our housing market is in a tough spot . We are wielding a double-edged sword that threatens the American Dream . We ’ ve got the tools to fix it if we ’ re willing to use them . Governmental agencies , land developers , and home builders need to start by rethinking their relationships and adopting a partnership that is a win-win-win for all parties .
We can turn this ship around but must first stop pointing fingers and build a better bridge toward affordable housing .
After all , owning a home isn ’ t just about putting roofs over a family ’ s heads ; it ’ s about creating communities and allowing people to build generational wealth . The key is to create incentives , not punishments , for building affordable housing . ■
For a list of the sources used in this article , please contact the editor .
Ben Caballero homesusa . com | bencaballero . com
In addition to homeowners deducting mortgage interest from their taxable income , why not allow mortgage lenders to deduct interest income from their income ? This could reduce mortgage interest by approximately two percent depending on the market interest rate .
Ben Caballero has been America ’ s No . 1 ranked real estate agent since 2013 . He is the only three-time Guinness World Records title holder and sold more than 7,000 homes last year . One of America ’ s leading new home sales experts for decades , he is an awardwinning innovator and home-building trailblazer .
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