Backlash from Final Tax Bill
Now that both houses of Congress officially passed the Republican tax reform plan, well known people and organizations have voiced their opinion. This being the most changes made to the tax code our generation has seen, the Inman Connect New York acquired a compilation of comments on the subject as followed:
National Association of Realtors (NAR)
- "The final tax reform bill is far from perfect, but it's been greatly improved for homeowners over previous versions. Realtors should be proud of the good work they did to help get us here. We generated over 300,000 emails to members of Congress through two calls for action and held countless in-person meetings with legislators, all of which helped shape the final product.
- "The results are mixed. We saved the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will also see a significant deduction on that business income.
- "Despite these successes, we still have some hard work ahead of us. Significant legislative initiatives often require fixes to address unintended consequences, and this bill is no exception.
Windermere Real Estate
- "There are changes to the income tax structure that will potentially have a significant impact on homeowners and the housing market. The first is the mortgage interest rate deduction which will be capped at $750,000 - down from $1,000,000. In theory this can be considered a tax on wealthy households, but there have been nearly 100,000 home sales this year where the mortgage loan was over $750,000 (almost 4% of total sales), so the effect will be felt more broadly.
- "That said, this change will disproportionately affect high-cost markets in California, New York, and Hawaii, and to a somewhat lesser degree, it will also be felt in Seattle, and parts of Colorado and Arizona. The capping of the deduction for state and local property taxes (SALT) at $10,000 will also negatively impact states with high property taxes, such as California, New York, and New Hampshire.
- "While these measures will likely have a dampening effect on housing, I do not believe they will lead to a substantial drop in home values. However, there is a concern that it will lead to fewer home sales, as households choose to stay put so they can continue to take advantage of the current mortgage interest deduction. The result could be fewer listings, which could actually cause home prices to rise at above-average rates for a longer period of time." - Windermere Real Estate Chief Economist Matthew Gardner
Check out the published article for more information.