While there are winners, losers and others, when it comes to the recently adopted tax reform legislation, this article will look at some of the effects and potential consequences, as they are specifically related, to real estate. Even within this topic, commercial real estate, rental properties, and property management companies are likely to potentially be significant beneficiaries, while some homeowners will find either a small impact or a negative one! In this article, an attempt will be made to briefly review and study 5 examples and consider general consequences, etc.
1. State and local taxes in the amount of 10,000 US dollars, amount: In the past, homeowners could deduct the full amount of their property taxes, as well as pay state and local taxes. The new law changes substantially , limiting deduction, maximum at $! 0.000 per year. For example, where I live, in Nassau County, Long Island, New York, each assessment states, we will, the most adversely affected area, in the country. This limited amount is negligible in the region where our so-called SALT taxes are substantially above, and this, by and large, has a negative impact on the values and selling prices of these houses. When property tax was completely franchise, this increased the relative value of ownership, as compared to rent, and thus economists and experts in this field expect at least a 10% price reduction, because of this. Doesn't this make property less desirable and, therefore, will have an undesirable effect on everything related to real estate in certain, specific regions of the country?
2 $ 750,000 Mortgage, maximum mortgage interest deduction: Currently, interest on mortgage loans are taxable, loans - up to a million dollars. This law changes this to $ 750,000, instead, for new mortgages. Especially in areas where housing prices were $ 950,000, and higher, this could have been expected to have a negative impact on sales of housing, real estate, as well as mortgage lenders.
3 Buying vs. renting: For the first time, buyers often weigh and / or balance property tenure as well as rent! They are often, a factor, a potential assessment, property ownership of a home, as well as deductability real estate taxes and mortgages, in this consideration, and then those who own rental property can make a profit, while others suffer!
4. Weekend pricing and property: Owning a second or country house becomes more difficult and problematic because they will no longer be taxed on real estate and / or mortgage interests on these properties. Ax-deductible The overall impact on the prices of most types of residential housing will certainly not be beneficial, the real owners, hoping to sell their homes, etc.!
5. Home sales: When the real estate market suffers, the overall economy does not flourish at all! We will see that commercial real estate, profits, in terms of their pricing and investment returns, and residential buildings in many parts of this country will become much more difficult to sell at the desired price (the current owner). their only major financial asset, this can create a situation where many, bystanders, unforeseen financial / economic losses!
Wake up for America, because there are consequences for everything, and this legislation creates several winners, many of which will flow - water, and many losers! Be prepared and act wisely!
