Real Estate Agents Mobilize to Shield Homeowners on Tax Plan
- 6 years ago
Real Estate Agents Mobilize to Shield Homeowners on Tax Plan
The Senate version of the tax bill would eliminate the deduction for local property taxes (the House bill caps it at $10,000),
and both the House and Senate bills would effectively make the mortgage-interest deduction less valuable to many homeowners.
If you’re in West Texas or Nebraska, no big deal, and you may even benefit.”
In New York and New Jersey, which have expensive homes
and high property taxes, home values could fall as much as 14 percent by 2019 under the Senate plan, according to the Moody’s analysis.
But now that those tax breaks are baked into the system, homeowners have come to count on them and in some cases could end up “underwater” —
that is, their home would be worth less than their mortgage — if their deductions were abruptly ripped away.
Both bills would roughly double the standard deduction, which would lead fewer households to itemize their deductions; households
that take the standard deduction don’t directly benefit from the mortgage-interest deduction, which reduces the value of owning a home.
According to an analysis of the plans by Moody’s Analytics, the nation’s most expensive real estate
markets could see significant declines in home values under both versions of the tax plan.
By Conor Dougherty and Ben Casselman
For decades, the real estate industry has benefited from generous tax deductions
that raise home values by making it cheaper for people to own property and shoulder their local taxes.
The Senate version of the tax bill would eliminate the deduction for local property taxes (the House bill caps it at $10,000),
and both the House and Senate bills would effectively make the mortgage-interest deduction less valuable to many homeowners.
If you’re in West Texas or Nebraska, no big deal, and you may even benefit.”
In New York and New Jersey, which have expensive homes
and high property taxes, home values could fall as much as 14 percent by 2019 under the Senate plan, according to the Moody’s analysis.
But now that those tax breaks are baked into the system, homeowners have come to count on them and in some cases could end up “underwater” —
that is, their home would be worth less than their mortgage — if their deductions were abruptly ripped away.
Both bills would roughly double the standard deduction, which would lead fewer households to itemize their deductions; households
that take the standard deduction don’t directly benefit from the mortgage-interest deduction, which reduces the value of owning a home.
According to an analysis of the plans by Moody’s Analytics, the nation’s most expensive real estate
markets could see significant declines in home values under both versions of the tax plan.
By Conor Dougherty and Ben Casselman
For decades, the real estate industry has benefited from generous tax deductions
that raise home values by making it cheaper for people to own property and shoulder their local taxes.