Should Homeowners Be Concerned About the Tax Reform?


    The National Association of Realtors® (NAR) is opposed to the tax reform legislation unveiled in the House last week. This bill is a huge concern to homeowners and consumers. Not only will millions of homeowners not benefit from the proposal, many will get a tax increase. Additionally, homeowners could lose substantial equity from the more than 10% drop in home values likely to result if the bill is enacted.

    What the Legislation Would Do

    Cap the Mortgage Interest Deduction at $500K for New Mortgages

    Cap applies to new mortgage debt (but not refinancing) incurred after November 2, 2017.
    Limit is not indexed to inflation causing its value to even further diminish over time.

    Increase the Standard Deduction

    Puts homeownership tax incentives beyond the reach of more than 90% of American families.

    Limit the Exemption on Capital Gains Tax From the Sale of a Primary Residence

    New rules would require homeowners to live in their home for 5 of 8 years before a sale to qualify for the exemption, versus just 2 of previous 5 years today. This will create a hardship to homeowners who have to move inside that five-year window.
    Exemption phases out for single filers with incomes over $250K ($500K for joint returns).

    Other Deductions Effected

    • Eliminate the Deduction for State and Local Income or Sales Taxes.
    • Eliminate the Deduction for Moving Expenses.
    • Eliminate the Deduction for Interest on Student Loans.
    • Eliminate the Deduction for Medical Expenses, Even for the Elderly.

    At What Cost?

    All this from a bill that is supposed to improve the current system. Not only is this legislation a danger to American homeownership, it will cost our children and grandchildren $1.5 trillion in new federal debt.

    • Millions of middle class homeowners would see a tax hike under this plan.
    • This plan attacks homeownership and sticks future generations with a $1.5 trillion price tag.
    • America’s homeowners should not pay for corporate tax cuts.
    • Hard-working homeowners will lose money when their home values fall, while corporations will get a huge tax break.
    • Homeowners in all 50 states would be double-taxed on the money they pay for state/local taxes.
    • If you buy a home and then have to move within 5 years, you could be hit with a big tax bill under this plan.

    Source: National Association of Realtors® (NAR)

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    Our agents write often to give you the latest insights on owning a home or property in the Central Virginia area.


    Justin and April were wonderful to work with! They helped us secure our dream home and made the process very smooth and easy. Justin worked with us on a Saturday evening to put in a winning offer on the home and April guided us through the closing process with reminder emails to make sure we stayed on track. They were very responsive to our questions and worked well with the seller’s agent to work out any kinks. We highly recommend this professional, fun team.
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