H.R.1—The One Big Beautiful Bill Act, enacted in July—included several of the National Association of REALTORS®’ top tax priorities. In an occasional series, NAR REALTOR® News is taking a deep dive into those tax reforms and what’s next for real estate professionals, homeowners and investors in real property.
Throughout the tax reform process in 2025, the National Association of REALTORS®’ advocacy team was deeply engaged in ensuring lawmakers understand how their decisions affect the broader housing market and help expand access to homeownership for more American families.
NAR successfully advocated for preserving the full mortgage interest deduction in the tax reform package. The MID allows qualifying taxpayers to deduct the interest paid on a home loan from their taxable income. This effectively reduces the amount of income subject to federal taxes, often resulting in meaningful savings.
For first-time buyers moving from renting to ownership who can itemize, the deduction can be a game-changer, illustrating one of the most tangible financial advantages of purchasing a home versus continuing to rent.
Broad Support for the MID
According to a national voter survey commissioned by NAR, an overwhelming 91% of voters support keeping the mortgage interest deduction.
The national survey of 1,000 registered voters was conducted by Public Opinion Strategies and Hart Research, April 3–6, with a margin of error of 3.10%.
Who Qualifies?
To claim the MID, homeowners must itemize deductions on their federal tax return rather than take the standard deduction. The mortgage itself must also meet IRS guidelines:
- The loan must generally be $750,000 or less.
- It must be secured by a primary or secondary residence.
“Unfortunately, itemizing is not always possible, even for homeowners,” says Evan Liddiard, NAR Director of Federal Tax Policy. “The standard deduction was nearly doubled in 2018 and is indexed for inflation, so it grows each year. Many first-time home buyers do not pay enough in mortgage interest, property taxes, and other state and local taxes, and in charitable contributions to exceed the amount of the standard deduction.”
“Thus, a growing number of homeowners can no longer gain the tax benefit of owning over renting a home that was once available to nearly all homeowners,” he says.
For many homeowners, however, the MID remains one of the most valuable financial incentives of owning a home.
Liddiard advises NAR members to get familiar with the deduction: “While it doesn’t apply to every taxpayer, a solid understanding of how the deduction works can help clients, and the REALTORS® who advise them, make smarter decisions when buying, selling or refinancing.”
The mortgage interest deduction continues to be a cornerstone of federal housing policy—reinforcing the financial advantages of homeownership while supporting the broader housing market. Real estate professionals who understand the basics can help clients evaluate their options and make informed choices that align with their financial goals.
