Study: Mortgage Interest Tax Deduction Does Not Affect Homeownership

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July 25, 2017

Of all the reasons to own a home, the opportunity to save a little bit on taxes every year is not a big enough perk for most people.

According to Curbed, a study from the Massachusetts Institute of Technology found that the mortgage interest deduction has “no effect on whether households own or rent,” and that a tax credit for first-time homebuyers might be more effective.

Some 30 percent of American taxpayers who itemize their deductions are eligible for the mortgage interest tax break.

The study was based on real estate data from Denmark in the 1980s, when the nation enacted a change in tax law.

The report comes during speculation over the final shape of the administration’s tax cut proposal, with early indications that proposed changes to the rule would decrease its effectiveness for many homeowners.

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