How the Tax Code Shapes Your Decision to Buy vs Rent

In episode 100 of The Tax Policy Podcast, Lucas and Luna explore how federal tax incentives tilt the financial calculus toward homeownership—and what that means for renters. They focus on the mortgage interest deduction and the capital gains exclusion on home sales, using a concrete example: a married couple deciding whether to buy a $400,000 home in Columbus, Ohio, versus renting a similar unit for $1,800 a month. Lucas breaks down the math: with a 30-year mortgage at 6.5%, the couple might pay $26,000 in mortgage interest in the first year, but only about $11,000 is deductible after factoring in the standard deduction. Luna adds data on how the tax benefit shrinks as interest rates rise and home prices climb. They also discuss the $500,000 capital gains exclusion for married couples, which encourages staying put and can distort mobility. The episode doesn't call for policy change—it simply asks listeners to look past monthly payments and see the tax code's hidden subsidy for one choice over another. #TaxPolicy #Economics #Homeownership #MortgageInterestDeduction #CapitalGainsExclusion #RentingVsBuying #TaxCode #HousingMarket #StandardDeduction #TaxSubsidy #FexingoBusiness #BusinessPodcast #ColumbusOhio #TaxPlanning #RealEstate #HousingAffordability #Mobility #Episode100 Keep every episode free: buymeacoffee.com/fexingo