US estate agents are urging legislators not to cut mortgage interest deductions for local taxes for fear of prompting a fall in house prices. The Senate version of the Republican tax plan would remove the deduction for local property taxes, while the House version would cap it at $10,000, and both would increase the period of homeownership required before qualifying for capital gains taxes, a move estate agents worry would reduce transaction volumes. “People who have been buying houses for years will be forced out because they can’t afford it,” said David Rosenberg, chief economist with Gluskin Sheff +
US estate agents are urging legislators not to cut mortgage interest deductions for local taxes for fear of prompting a fall in house prices. The Senate version of the Republican tax plan would remove the deduction for local property taxes, while the House version would cap it at $10,000, and both would increase the period of homeownership required before qualifying for capital gains taxes, a move estate agents worry would reduce transaction volumes. According to analysis from Moody's, the most expensive property markets, such as New York or New Jersey, could be the worst hit by the proposed measures.