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You are here: Home / Real Estate / 5 reasons Trump’s tax plan is bad news for real estate

5 reasons Trump’s tax plan is bad news for real estate

November 10, 2017 by MelanieDawn Leave a Comment

Tax bills would mean families will need to stay in their homes longer to get the capital gains exemption.

Joseph Rand does not like the proposed federal tax reform bill, and he’s not shy about saying so. In an opinion piece for Inman News, Rand writes: “This is not a good tax bill for housing or the industry.”

President Trump and the Republican congressional leadership have proposed a new tax bill. The bill consolidates some income tax rates, lowers the corporate tax rate, reduces the tax rate for certain pass-through businesses, eliminates the estate tax and takes away many long-established deductions and exemptions.

Sounds great, right?

Well, it’s terrible for housing. Really terrible.

Rand, predicts that this bill – if passed – would further depress already historically low home ownership. His 5 top concerns are:

  • The bill reduces the value of the mortgage interest deduction for new buyers and will adversely impact higher-priced homes ($500,000+)
  • The bill requires people to stay in their homes longer to get the capital gains exemption
  • The bill makes homes with high property taxes much less attractive
  • The bill eliminates the deduction for moving expenses
  • The bill makes second homes and vacation homes much more expensive
Proposed tax bills eliminate deductions for moving expenses

Rand goes on to note,

Here’s what’s also kind of strange — on top of all these disincentives to buy or sell a home, the tax bill simultaneously creates or preserves a number of advantages for owning investment property. In other words, the tax bill is bad for homeowners but not for real estate investors. Odd, right?

I don’t think it is odd at all, given the authors/backers of this bill.

Joseph Rand is not alone in his negative opinion of the House and Senate tax bills.

Elizabeth Mendenhall, president of the National Association of Realtors, released a statement, saying:

While we are still reviewing the outlines of this proposal, we are watching closely for changes to current law that might leave middle-class homeowners – and homeownership broadly – in a worse place than it is today. We’ve already seen that a near-doubling of the standard deduction, combined with the elimination of other deductions like the state-and-local tax deduction, can turn the American Dream into a nightmare for families, as the rug is pulled out from under them. Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership.

Filed Under: Real Estate Tagged With: National Association of Realtors, tax, tax bill

Melanie Dawn Molina Wood is a licensed real estate agent and real estate educator living and working in the Downtown Miami – Brickell area. She is a Certified International Property Specialist and an accredited LEED Green Associate. For more information about real estate in the Miami area, or to connect with a real estate agent anywhere in the world, contact Melanie Dawn by text/phone at 305-801-3133, or by email at MelanieinMiami@gmail.com

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