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Published in the Washington Examiner
The Jan. 24 opinion piece, “Realtors spent $22 million to defeat Republican tax reform in 2017,” has more holes in it than a slice of Swiss cheese.
The article misses several key points on why Realtors® vigorously protected millions of homeowners from potentially large tax increases and significant declines to the value of their home.
Our nation’s tax code has encouraged homeownership for more than 100 years. After carefully reviewing proposals of GOP tax plans in early 2017, Realtors® quickly found out that simply doubling the standard deduction didn’t even come close to translating to a “tax cut” for middle-income Americans.
In fact, third-party research revealed that millions of these homeowners would have actually seen an average tax increase of $815, along with their home values shrinking by an average of 10 percent. Is that really “keeping more money in your pocket?”
Thankfully, our efforts helped save most homeowners from these tax hikes, shielded home sellers from being exposed to new capital gains taxes, and ensured that many future homebuyers will still be able to deduct their mortgage interest and property taxes.
Just this week, our own data showed that national home sales climbed 1.1 percent in 2017 to their strongest performance since 2006, and home prices rose 5.8 percent – the fifth straight year of price gains at or above 5 percent. That’s some serious wealth creation for millions of homeowners.
Unfortunately, because of the changes to the mortgage interest deduction and state and local tax deductions under the new law, there is less incentive to be a homeowner, and for this year, NAR is projecting price growth of only 1 to 3 percent. In some expensive, high-taxed markets, there will likely be a decline.
Don’t believe us? Pay close attention to the local news reports across the country. You’ll see there’s tremendous concern from homeowners now facing steep tax increases and the prospect of diminishing value to their home.
That’s proof that there is more work to be done. Whether or not tax reform will ultimately be positive for the housing market is still unclear. One thing that is certain is that Realtors® will continue to stand up for the nation’s 75 million homeowners.