Senate Republicans released their version of a tax reform bill Thursday, and although it differs from the House’s plan, it calls for the elimination of the deductions for property taxes and other state and local taxes.
“While we are still reviewing the outlines of this proposal, we are watching closely for changes to current law that might leave middle-class homeowners—and homeownership broadly—in a worse place than it is today,” NAR President Elizabeth Mendenhall said in a statement. “We’ve already seen that a near-doubling of the standard deduction, combined with the elimination of other deductions like the state and local tax deduction, can turn the American dream into a nightmare for families. Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership.”
A detailed look at the Senate bill’s impact on homeowners will be published soon.
Meanwhile, the tax-writing Ways & Means Committee has marked up the House’s “Tax Cuts and Jobs Act.” NAR opposes the House bill because it imposes new limits on the mortgage interest deduction and the property tax deduction and eliminates the deduction for state and local taxes. These changes, along with others, will lead to a tax hike for many middle-income homeowners, even though the bill would double the standard deduction. The bill also makes it harder for households to take the capital gains tax exemption on the sale of their house. Learn more about the House bill in the Voice for Real Estate video below.
—Robert Freedman, REALTOR® Magazine