General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHere's how the Trump tax plan could affect your home value
Not sure if I agree with the first sentence.
__________________________________
President Donald Trump's push to cut taxes is a rare policy expected to draw political support from both sides of the aisle. But one aspect of the overhaul could doom it: a White House move that would effectively eliminate the mortgage-interest deduction, a perk cherished by millions of homeowners around the U.S.
If some version of Mr. Trump's plan is adopted, all but the wealthiest Americans will no longer be able to deduct the interest paid on a home loan. That's great news for proponents of rational markets, while potentially saving the U.S. government nearly $70 billion a year. But it would be bad news for current mortgage holders.
In many areas of the country, where a tight housing market means house-hunters increasingly have to stretch to afford even a starter home, closing the door on tax-preferred borrowing would make the math of large mortgages that much less favorable.
In particular, would-be buyers in recovering housing markets, many of them in cities, would find themselves hard-hit, according to an analysis from Trulia, the real-estate listing service. The biggest blow would land on cities with high housing costs, scarce housing supply or both. According Trulia, metro areas across the country, ranging from Dallas and Denver to Seattle and Boston, could see the loss of the mortgage-interest deduction scare away prospective buyers. That, in turn, would make housing prices slide, according to other analyses.
https://www.msn.com/en-us/money/realestate/heres-how-the-trump-tax-plan-could-affect-your-home-value/ar-BBBCS2B?li=BBnbfcN&ocid=edgsp
Hoyt
(54,770 posts)But, the significant increase in the standard deduction will mean many homeowners won't have to itemize. And, those who don't own a home will benefit from the larger standard deduction. If those people actually have more money to spend; theoretically, it would spur economic growth.
But, who knows what the final tax plan will actually include. Can't trust Trump or GOPers.
Yo_Mama_Been_Loggin
(107,063 posts)How many mortgages would suddenly be under water? One might not be able to sell one's house for what's owed on it.
Hoyt
(54,770 posts)deduction or being able to deduct mortgage interest above the standard deduction, there should not really be a change except for the psychological effect. If Trump's tax plan did increase the standard deduction to $24,000 for a married couple, that would more than cover the itemized deductions most people use under current law, even with a mortgage. And, it would increase money in peoples' pockets, improving the economy.
Again, this is all conjecture because no one knows what Trump or Congress will do. I don't believe Trump and Congress will ultimately cut taxes for the wealthy (through elimination of ACA tax and changes to tax rates), and middle class and poor (through significant increase in standard deduction).
edhopper
(33,164 posts)sounds like it is written by a GOP anti-tax real estate vulture.
Their take on these ruinous tax cuts is naive and misleading.
Cicada
(4,533 posts)Affluent people pay more for homes because they save taxes. Those who don't make enough to owe much income tax get little benefit. And they have to pay more for a house. And even the affluent don't save money. The price they pay for a home is driven up because of the deduction. If they didn't get a 25% subsidy on mortgage interest the cost of the house would be 25% less. So they would be economically about the same.
We never should have let people deduct mortgage interest. But transitioning away from that is hard. Maybe each year the deduction should be reduced a tiny bit until in 50 years the deduction is gone. We need something like that.