San Diego Real Estate–GOP Tax Plan The Beginning of a Recession?
San Diego Real Estate–GOP Tax plan the beginning of a recession?
Let me first say, I am a real estate agent first and foremost. That means, I am pro homeownership. I want you to buy homes because that’s how you build wealth in this country. However, the new GOP tax plan could be an assault on your wallet.
Why? Well, the 429 Page GOP tax plan called “The Tax Cuts and Jobs Act,” would limit the home mortgage interest from $1 million to $500,000–which helps reduce taxable income for homeowners.
This is such a big deal for those of us in coastal markets like San Diego where home prices are tipping over $500,000. This bill would essentially bump out millennial buyers. That’s because those buyers are skipping entry level homes are going straight to the million dollar price range.
Let’s take for example a buyer purchasing a million dollar home puts 20% down. That’s $200,000. That buyer’s mortgage is $800,000. That means the buyer could only deduct the interest on the first $500,000–leaving them to foot the bill for the other $300,000.
In an article published in Business Insider, Jerry Howard, CEO of the National Association of Home Builders says an estimated 7 million homes would be excluded from the mortgage interest deduction–that’s up to one third the homes in CA.
What else is taking a hit SALT deductions. That means the property taxes and state income deductions taken are also under attack.
If you would like to express your concern to your elected officials click here to locate your representative.
For information on buying a home, selling a home or investing in real estate, give me a call at 619-818-2992.