Posted on 12/05/2017 7:47:01 AM PST by SeekAndFind
The GOP tax bill should keep homeowners on alert.
Early on Saturday, Senate Republicans passed their version of the bill, called the Tax Cuts and Jobs Act, pushing it closer to President Donald Trump's desk for signing. The bill's differences from House Republicans' version, passed in mid-November, will now be negotiated in a conference committee.
The key difference for homeowners is in the amount of mortgage interest they can deduct from taxes.
The House's version, which housing-industry trade organizations swiftly condemned, halves the mortgage interest deduction, to the first $500,000 of a loan.
The Senate's version maintains the status quo at $1 million but removes the current deduction for interest paid on home equity debt. It also increases the standard deduction for all income subject to taxation to $12,000 for individuals (from $6,350) and $24,000 for married couples (from $12,700).
This means that, like the House's bill, the Senate's version removes some incentives for homeownership, said Danielle Hale, the chief economist at Realtor.com.
(Excerpt) Read more at finance.yahoo.com ...
If the House’s plan to cut the mortgage interest deduction to the first $500,000 of a loan becomes law, it will remove a benefit for new homeowners in many high-cost markets.
The share of recent purchase loans from $500,000 to $1 million is as high as 48% in San Francisco, 38% in Los Angeles, and 22% in the Washington, DC, area, Hale said.
“For some of those homebuyers, the lack of those deductions might mean it makes sense to buy a home or it doesn’t make sense to buy a home,” Hale said.
Home prices could fall because of lower demand. But more-expensive markets would be hit hardest. DC, Hawaii, California, New York, and Connecticut have the most people with mortgages over $500,000, according to The Washington Post.
More progressive BS promoted by Yahoo.
Time for a flat tax
Good. Do away with it. Why should the rest of us have to make up the difference? Same with the child care credit. Same with a hundred other credits. It should be based on income and income only.
People don’t really need to own their own homes. They are still going to live somewhere.
https://www.zillow.com/san-francisco-ca/home-values/
The median home value in San Francisco is $1,249,000. San Francisco home values have gone up 11.7% over the past year and Zillow predicts they will rise 2.3% within the next year.
The median list price per square foot in San Francisco is $994, which is higher than the San Francisco Metro average of $463. The median price of homes currently listed in San Francisco is $1,199,000 while the median price of homes that sold is $1,193,492.
The median rent price in San Francisco is $4,450, which is higher than the San Francisco Metro median of $3,295.
Home sales may increase as lower income people would selling their city homes, and be seeking homes in the more rural area and then commute, rather than live in the city. Time for more suburban track homes to be built under 300K each.
Eliminate it and the market price of houses will come down accordingly and the result will be a wash.
A reduction in home pricing in California would be a good thing, as far as I am concerned. Too many working people are priced out of the market here.
Of course, real estate professionals would have a different opinion. The higher the sales price, the higher the commission.
Yup. More boo-hoo.
As I recall, if your income exceeds a certain limit your deductions are limited anyway. That certain limit seems to coincide with the ability to make payments on a $500,000 loan. In other words, if you can pay a $500,000 mortgage your income probably limits the amount you can deduct anyway.
Duh.
I think they should lower it to $200k. If they don’t like it they can move. Good for the rural folk. The $300k homes will go down in value-more affordable. Some day the deduction will prove to hurt housing availability.
It will be interesting to see what transitional issues may arise, but in the long run, the effect of the home mortgage interest deduction is primarily to drive up the cost of housing. Eliminate it and housing costs will be lower at the front end than they otherwise would have been. That's good for homebuyers. It's bad for realtors and mortgage lenders whose income is based on percentages and who have a vested interest in inflated housing costs.
For new homebuyers, you will pay less up front and receive less when you sell. It nets out. The transitional issue is how much the change erodes the existing equity of current homeowners. My guess is that if the change is modest, it will be disguised by generally rising home prices, at least in the big urban markets, so that nominal equity does not decline. People will shrug that off; out of sight, out of mind. If there is a noticeable decline in nominal prices in resales, however, there will be squawking. That, again, is just a transitional issue. In the long run, we are better off without the artificial inflation of housing costs.
If the House’s plan to cut the mortgage interest deduction to the first $500,000 of a loan becomes law, it will remove a benefit for new homeowners in many high-cost markets.
Outstanding. That is a feature and not a bug of the bill. Housing prices are grossly over inflated in some places. Way past time that bubble was popped.
Can you explain that one please?
Why should tax payers in harard county tennessee subsidize the interest on million dollar home buyers in SF and NY?
All the mortgage deduction does is raise the price people are willing to pay for houses.
Eliminate it and the market price of houses will come down accordingly and the result will be a wash.
Exactamundo. Right now in areas like the S. F. Bay Area if you are a young home buyer and don’t have rich parents you are frozen out of the market.
Fact check..... if you owe 1,000,000 on a house you don’t own it. The bank does
This was my take on it as well. It is truly a brilliant plan with changes for long term especially.
Yahoo?
Fegedabowdit.
Even dumber than CNN.
But just as corrupt.
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