What's Hot: Washington Spirit Owner Michele Kang Lists DC Home for $14.5 Million | The Smallest Home on the Market in DC
How Today's Proposed Tax Reform Bill May Impact Homeowners
Congressional Republicans plan to release their long-awaited tax reform bill on Thursday, and there are a variety of reform provisions that may impact homeowners.
- An increase in the standard deduction — While many homeowners, especially those with higher incomes and high mortgages, itemize their deductions, the higher standard deduction may exceed what could have been itemized, potentially weakening the incentive to make a home purchase.
- A standardized property tax deduction — This provision is intended to simplify the existing deduction, which allows homeowners to deduct their state and local property taxes from their federal taxable income and which currently can only be claimed by those who itemize their taxes.
- An elimination of the mortgage interest deduction for homebuyers with mortgage debt over $500,000. — The fate of the mortgage interest deduction was bandied about throughout the year, with many concerned that reform plans would counter campaign promises made by the current administration to leave the deduction untouched at its $1 million-of-mortgage-debt level.
story continues belowloading...
story continues above
While preservation of the deduction in its current form for existing homeowners is intended to be a compromise, capping future deductions at $500,000 of mortgage debt is unlikely to assuage the fears of the National Association of Realtors, which has been lobbying against any alterations to the deduction.
“We are currently reviewing the details of the tax proposal released today, but at first glance it appears to confirm many of our biggest concerns about the Unified Framework,” NAR President William E. Brown said in a statement. “Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, and from a cursory examination this legislation appears to do just that.”
The new deduction cap has major implications for the DC region and the District in particular, as being able to buy a house for $500,000 is far from guaranteed in many neighborhoods.
UrbanTurf will continue to keep an eye on the bill’s progress going forward.
Correction: This article previously stated that the mortgage interest deduction would apply to houses valued above $500,000. That was a misstatement that has since been corrected; the deduction would be eliminated for future homeowners with mortgage debt over $500,000.
See other articles related to: federal government, mortgage interest deduction, property taxes, taxes
This article originally published at https://dc.urbanturf.com/articles/blog/how_proposed_tax_reform_may_impact_homeowners/13209.
Most Popular... This Week • Last 30 Days • Ever
Our guide for amateur landlords who don't really know what they're doing.... read »
Whole Foods announced yesterday that the 47,000 square foot store will open on June 2... read »
The Massachusetts Avenue Heights home was previously owned by the former chief execut... read »
A large new apartment and townhouse project has been pitched for the growing pipeline... read »
With Dan and Tanya Snyder moving out of River View, the region may soon have a very e... read »
Virginia's homebuyer assistance programs can seem complex. This edition of First-Time... read »
The residential projects that have sprouted up on the Maryland and DC sides of the Fr... read »
With a groundbreaking ceremony on Wednesday, the redevelopment of the Georgetown Wes... read »
The 23,600 square-foot mansion just hit the market, and would set a record if it fetc... read »
The immaculately kept 100-year-old house features six bedrooms and four-and-a-half ba... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
- The Essential Guide to Being an Amateur Landlord in DC
- Whole Foods at Walter Reed to Open at End of June
- Washington Spirit Owner Michele Kang Lists DC Home for $14.5 Million
- A Two-Phase, 370-Unit Development Pitched For Columbia Pike Gas Station Site
- Will This Be the Most Expensive Home on the Market in the DC Area?
- First-Timer Primer: Virginia's Home Buyer Assistance Programs
- Mall Conversions, Trader Joes? The 1,500 Units in the Friendship Heights Pipeline
- The Four Seasons Private Residences in Georgetown Break Ground
- DC's Blaine Mansion Lists For $30 Million, A Potentially Record-Setting Price in the City
- Now Selling: A 16th Street Heights Victorian on an Island of Its Own
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro