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 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 Guess they are taking care of those who have been around for a long time In short, I’m not negatively affected by the tax reform.
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.
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