Trump Tax Reform and Home Prices
- Thread starter Goriot
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You are actually better off paying the taxes next year. If you make A certain amount of money you get no federal benefit for your property tax deduction. I?m assuming many on this board are in that scenario. In 2018, under the new rules, you get the 10k deduction and with no AMT. so if you itemize your mortgage interest + donations + property tax deduction of 10k you will probably exceed the standard deduction and get an actual benefit from the property tax deduction that AMT phases out in 2017
What you might see in terms of a trend, perhaps, is that less people will want to sell (in addition to maybe less people buying) so they can retain their current MID and situation. This will further be compounded by the change from having access to the 500k free capital gains at the 5 year mark instead of the 2 year mark.
Also, if less people can afford to buy, they will rent, which could mean higher rental income. This will attract investors, so perhaps more will buy homes with the feeling that they can get good rental returns?
With regards to Irvine specifically, I don't really know the exact numbers, but I suspect a good amount of transactions in Irvine are FCBs who aren't really impacted by things like the MID and property tax write-offs. So I think Irvine will continue to rise, maybe just not quite as rapidly as before?
Hard to say.
The new tax rule won?t affect those all cash buyers. And those high end home purchases by those high income ($300k + a year) and high net worth buyers already limited their tax deductions by AMT and their over $1m mortgages, new rule don?t change much for them. Also they can afford paying extra taxes.
The new rules also don?t affect Irvine entry level priced homes under $700k-$800k. With MR, their total property tax should keep under $1m. And with high down payment, they can keep mortgages under $500k.
Biggest impact with the new tax rule are those properties between $800k to $1.8m. New rule will just cost these buyers more. For Irvine, I think these buyers can still afford paying these extra taxes but not sure how much of an impact on sales.
November 2, 2017
Press Release
November 2, 2017
(202) 225-5611
The Tax Cuts and Jobs Act is a Win for the Middle Class and American Enterprise
Washington, DC ? Rep. Mimi Walters (R-California) released the following statement regarding today?s release the Tax Cuts and Jobs Act.
Said Rep. Walters, ?Today, House Republicans took a major step toward ending the tax code status quo and delivering on the promises we made to the American people. The Tax Cuts and Jobs Act will provide much needed tax relief for hard-working taxpayers across the country squeezed by a federal tax code that is outdated, complex and unfair.
?Under our plan, tax rates will fall, the standard federal deduction will double, and middle class workers will benefit. This means Americans will get to keep more of their hard-earned paychecks.
?The Tax Cuts and Jobs Act will also make the United States into one of the most business friendly environments in the world. These long overdue changes will put the government back on the side of job creators and those working to create prosperity for us all.?
Agreed, it's hard to project the impact. Just some initial guesses from both sides:
1. Buyers: It will definitely subtract some buyers from the pool, but probably not too many overall. The elimination of AMT helps offset some of the tax changes, so in terms of what people "take home," it'll be fairly close. It does, however, significantly impact the tax advantage to buying a home itself, so there will be less people who buy a home simply for the tax advantages it confers. This obviously also has no impact on foreign cash buyers, who make up a decent chunk of Irvine property transactions.
2. Sellers: you'll also see less sellers too, as people won't want to take on a new mortgage with the new MID cap. Likewise, with the change that you need to occupy your residence for 5 years instead of just 2 to sell for 500k tax-free capital gains, people will stay put longer too.
So, less buyers and less sellers = ?. Hard to say.
irvinehomeowner
Well-known member
They can take away all real estate related tax deductions and Irvine prices will still be high.
Because just like qwerHOA doesn't abide by CC&Rs, FCBs don't report real income.
Because just like qwerHOA doesn't abide by CC&Rs, FCBs don't report real income.
qwerty
Well-known member
Jantoven said:
You are actually better off paying the taxes next year. If you make A certain amount of money you get no federal benefit for your property tax deduction. I?m assuming many on this board are in that scenario. In 2018, under the new rules, you get the 10k deduction and with no AMT. so if you itemize your mortgage interest + donations + property tax deduction of 10k you will probably exceed the standard deduction and get an actual benefit from the property tax deduction that AMT phases out in 2017
irvinebullhousing
Well-known member
Will we see a crash in realestate transactions later this year or next?
Even as the bill will see further push back by the homeowners and NAR, this certainly spook alot of potential buyers right now. Many will hold and certainly renting is the better move in the near or forseeable future.
This will have a major impact on Residential building and constructions as whole.
Even as the bill will see further push back by the homeowners and NAR, this certainly spook alot of potential buyers right now. Many will hold and certainly renting is the better move in the near or forseeable future.
This will have a major impact on Residential building and constructions as whole.
Compressed-Village said:
What you might see in terms of a trend, perhaps, is that less people will want to sell (in addition to maybe less people buying) so they can retain their current MID and situation. This will further be compounded by the change from having access to the 500k free capital gains at the 5 year mark instead of the 2 year mark.
Also, if less people can afford to buy, they will rent, which could mean higher rental income. This will attract investors, so perhaps more will buy homes with the feeling that they can get good rental returns?
With regards to Irvine specifically, I don't really know the exact numbers, but I suspect a good amount of transactions in Irvine are FCBs who aren't really impacted by things like the MID and property tax write-offs. So I think Irvine will continue to rise, maybe just not quite as rapidly as before?
the.irvine
Active member
Can someone here please help?
Like most of you, we have 1st installment of property tax bill due by Dec 2017.
Two questions based on above discussions.
1. Is it possible to delay current tax installment in Dec without risking penalties etc?
2. If the answer to 1 is Yes, then what is the potential benefit of it.
Like most of you, we have 1st installment of property tax bill due by Dec 2017.
Two questions based on above discussions.
1. Is it possible to delay current tax installment in Dec without risking penalties etc?
2. If the answer to 1 is Yes, then what is the potential benefit of it.
irvinebullhousing
Well-known member
Sure, you can delay. There is a cost. 10 percent of your first installment is tact on to the bill.
the.irvine
Active member
Wait if you can. If you are a cash buyer, then doesnt matter
CAL said:
Hard to say.
The new tax rule won?t affect those all cash buyers. And those high end home purchases by those high income ($300k + a year) and high net worth buyers already limited their tax deductions by AMT and their over $1m mortgages, new rule don?t change much for them. Also they can afford paying extra taxes.
The new rules also don?t affect Irvine entry level priced homes under $700k-$800k. With MR, their total property tax should keep under $1m. And with high down payment, they can keep mortgages under $500k.
Biggest impact with the new tax rule are those properties between $800k to $1.8m. New rule will just cost these buyers more. For Irvine, I think these buyers can still afford paying these extra taxes but not sure how much of an impact on sales.
Why not reduce the tax break for donating for nonprofits or exempt organizations. Also, why not tax non profits in general at a lower rate. (The endowments are huge, contribution income some non profits get is rediculous) Nonprofits don?t pay property taxes.
They don?t use the police or fire service? They don?t use the roads?
Some hospitals and health care plans are tax exempt!
They don?t use the police or fire service? They don?t use the roads?
Some hospitals and health care plans are tax exempt!
Are any of the California Republican representatives coming out in opposition? From what I can read most are at least remaining silent if not outright supporting it (McCarthy). The party line of 'don't look at it just from the perspective of deduction elimination' or 'it's not that simple' is really just political speak. Actually, for many Californian's who either own a house > 500k or make the income via standard W2 wages, this proposal, in current form, will absolutely do a 1-2 on us. Yes it is that simple. As such our reps need to be vocal against the provisions as they stand today. Elimination of SALT, reductions on property tax, and minimal mortgage interest should be deal breakers. At least the NY/NJ/CT reps see that and are being vocal about it. Ours....crickets.
CA 45 Rep Mimi Walters is outright supporting. https://walters.house.gov/media-cen...-act-win-middle-class-and-american-enterpriseOCHouse99 said:
November 2, 2017
Press Release
November 2, 2017
(202) 225-5611
The Tax Cuts and Jobs Act is a Win for the Middle Class and American Enterprise
Washington, DC ? Rep. Mimi Walters (R-California) released the following statement regarding today?s release the Tax Cuts and Jobs Act.
Said Rep. Walters, ?Today, House Republicans took a major step toward ending the tax code status quo and delivering on the promises we made to the American people. The Tax Cuts and Jobs Act will provide much needed tax relief for hard-working taxpayers across the country squeezed by a federal tax code that is outdated, complex and unfair.
?Under our plan, tax rates will fall, the standard federal deduction will double, and middle class workers will benefit. This means Americans will get to keep more of their hard-earned paychecks.
?The Tax Cuts and Jobs Act will also make the United States into one of the most business friendly environments in the world. These long overdue changes will put the government back on the side of job creators and those working to create prosperity for us all.?
lnc said:
Agreed, it's hard to project the impact. Just some initial guesses from both sides:
1. Buyers: It will definitely subtract some buyers from the pool, but probably not too many overall. The elimination of AMT helps offset some of the tax changes, so in terms of what people "take home," it'll be fairly close. It does, however, significantly impact the tax advantage to buying a home itself, so there will be less people who buy a home simply for the tax advantages it confers. This obviously also has no impact on foreign cash buyers, who make up a decent chunk of Irvine property transactions.
2. Sellers: you'll also see less sellers too, as people won't want to take on a new mortgage with the new MID cap. Likewise, with the change that you need to occupy your residence for 5 years instead of just 2 to sell for 500k tax-free capital gains, people will stay put longer too.
So, less buyers and less sellers = ?. Hard to say.
