SILVAR. How Tax Reform will Affect BA Real Estate


higher standard deduction : They removed personal tax exemption and merged in standard deduction. The actual increase is meager !

On any case, this tax reforms hits Higher Earners and give the benefit to Corporate taxes ! Good for Country, bad for higher earners, esp Bay area people with higher mortgages.


Without numbers, it’s hard to know whether your tax is up or down, and by how much.

Let’s use a few typical cases for a theoretic typical taxpayer.


Not in the owner’s picture.

I’m not an American so not sensitive to nuances :blush: analogy seems right :roll_eyes:

They do. They also don’t. Depending on how your compartmentalized.
I put SALT ahead of mortgage interest and property tax, so it does.


hmmm, if people do not understand AMT, how it is my fault or Dougz fault?

Please understand this: Before creating tax concessions, USG team (many committees) go back and forth lot of research and documents to see deficit, revenue etc.

The corp tax reduction must be loaded on someone’s head, that is high earners head, high mortgage people etc.

Without even seeing the details, if Jane’s (or anyone’s) joint filing is more than 150k in 2017 tax and itemized with california mortgage, she/he stands to pay higher in 2018 !


She says less. Dougz says is higher. So you agree with Dougz that should be higher without seeing the details?


As highlighted above didn’t mention it for owners because I would assume most home owners itemize.


It’s just a math problem, why is it so hard to get an answer on up or down? Give the numbers, we can calculate offline and have a vote! (Don’t give your real numbers, just give some ballpark number for us to exercise 5th grade math.)


i.e. is it retroactive?


It might be still up for lobbying. Call your representives now


I know, just fooling around. I did a quick computation, my total tax payable is about the same. So in my case, can say reduction in tax rate compensates for the loss in deduction for SALT (actually is max $10k under tax reform but I would be using standard deduction of $24k). Guess is because I don’t a mortgage. I also stay in the same house for more than 10 years :rofl: Guess they are taking care of those who have been around for a long time :grinning: In short, I’m not negatively affected by the tax reform.


I’m just the messenger.

In the most affected areas, the higher taxes could make real estate less desirable and force prices to drop, some observers say. The National Association of Realtors, which has outlined the tax bills’ impact on every state and the District of Columbia, has estimated, for instance, that as a result of federal tax reform, home prices in California could drop, on average, from 8 to 12 percent. The decline would mean a loss in home value of $37,710 to $56,550 for the typical homeowner, the association concludes.


I agree 100%,and I am confident that all CA earners above 150k, having mortgage big deduction (esp bay area buyers above 1M home), property tax…etc needs to pay additional tax than reduction in their tax.


I still think the tax “reform” will not impact the RBA real estate market much. We are so constrained on the supply side. And frankly people here have lots of money and they will benefit from measures that reward capitalists like more stock dividend. So I am not worried about the folks who buy 1m+ houses, let alone 2 or 3M. These people are not driven by tax optimization.

Also the tax rule will make inventory even thinner by making the tax free residency years longer. People will have to stay longer to avoid cap gain tax. Plus the new mortgage can’t get interests deducted. All these will make inventory super thin.

However what about the lower end market like CC county? @wuqijun may need to worry about that.


When we evaluated how a couple making $220,000 in suburban Westchester County, N.Y.—and paying $22,000 in property taxes and $9,727 in state income taxes—would fare under both plans, we found that the House plan would cost them an additional $1,568 and the Senate bill would leave them essentially even. The disparity was due to a number of factors, such as more favorable overall tax brackets and rates in the Senate plan.

No mention of mortgage.

Jane could be like me. No mortgage and relatively low property tax because have been staying in the same house for a long time.


Nothing at the lower end market I would need to worry about w/r to this that higher end market wouldn’t.


I came up with one hypothetical family with below details.

  1. annual income: 700,000
  2. SALT deduction: 50,000(state_tax) + 20,000(property_tax)
  3. Other deduction: 40,000 (mortgage + donation + etc)

Under the current law:


AMT: (660000-187000)x0.28+187000x0.26 = 181,060

Under tax reform:


According to above calc, tax for this family goes down by $2,000.
Now, let me know which part of calc is wrong.


Agreed for this scenario! Never imagined this level!! Thanks.


Jane has done an excellent analysis. This has proved my view. Most BA people will get a flat or slightly improved tax.

Getting a smaller tax cut than our neighbors in Nevada is disappointing, but it’s not accurate to portray it as a big tax raise.

So BA people will have more or less the same after tax income. What’s the impact on RE? Probably close to nil in the short term. Will media cause a panic in home buying market? Probably a little bit but smart buyers will analyze and get the correct answer for their tax change


Jane has done analysis, correct, but that does not mean “Most BA people will get a flat or slightly improved tax

The highlighted part is not a conclusion of Jane’s analysis result.


I can provide at least 10 scenarios where BA people will pay minimum 2k additional taxes.


Ok, provide a case of a typical taxpayer who will pay 2k more in tax, and show us the exact percentage of tax hike for him or her.

We are arguing by rhetoric, which is just an echo of the intelligence lacking and ethics suspicious media.