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December 4, 2012

Area brokers: Keep mortgage deduction

(Continued)

“If that weren’t to be there anymore, certainly it wouldn’t be as … enticing, for people” to buy a home, she said. “Am I saying that no one would purchase a home? No, I’m not saying that. But it certainly would be a negative.”

But others weren’t less certain about the possible effects of eliminating the longstanding deduction.

“I’m not certain that it’s going to impact price in any way,” said Eric Hill, an associate broker at Don Olin Realty in Cooperstown.

“The initial six months could show some negative reactions, particularly if there is a rise in the interest rates, which we all have been waiting for for the last couple of years,” he said. “If that transpires and parallels the elimination of the deduction, there will be a quiet period of adjustment.”

Roberts said she thought some homeowners might escape much of the burden.

“Many people in the lower price ranges don’t itemize their deductions,” she said. “They just take the standard deduction. So those folks, it’s not going to impact at all.

“And it probably won’t impact the very, very high mortgage amounts. … What will happen there, the wealthy, rather than take out a mortgage to mitigate their taxes, will just pay cash. So, it’s going to impact the middle and the upper middle class.”

Thomas, on the other hand, thought the effects of such a move would be felt “right across the board.”

She also said other market factors might help offset the loss of the mortgage-interest deduction.

“Interest rates are at historic lows,” she said. “That entices people to buy. … So, we’re actually seeing a pretty good market for this time of year. I think everyone would agree that it’s been really steady for us this year, and the market is certainly picking up a little bit.”

The prospects for action to eliminate the deduction were unclear Monday. Recent reports have indicated that Congress was more likely to cap the deduction.

“My personal feeling is that it’s not going to happen,” Roberts said of eliminating the deduction.

“I think they’ll do something that will cap overall deductions, cap mortgage deductions, as oppose to eliminating it entirely. That would really surprise me if it happened.”

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