Tax Reform. We heard those words over and over again during the 2016 election cycle. Then-candidate Donald Trump made it one of his top campaign priorities in the weeks and months leading up to election day. Down ballot races for the House of Representatives and State elections were won on the promise of simplifying the tax code while simultaneously cutting taxes.
Enter: the highly anticipated House GOP tax reform plan released last week. It is being touted by Republican leaders as a great plan for all Americans that will lower taxes and boost the economy. What is not being talked about? How the plan is a direct threat to consumers, to homeowners, and to the real estate industry. The National Association of Realtors is OPPOSED to this tax reform plan. "Why is NAR opposed?", you might ask. The latest talking points from NAR will give you some insight.
What the House GOP Legislation Would Do:
- Caps the mortgage interest deduction (MID) at $500k for new mortgages
- This limit is not indexed to inflation causing its value to even further diminish over time
- Increases the standard deduction
- The standard deduction would double from $6,000 to $12,000. This increase puts homeownership tax incentives beyond the reach of more than 90% of American families
- Limits the exemption on Capital Gains Tax from the sale of a primary residence
- New rules would require homeowners to live in their home for 5 of 8 years before a sale to qualify for the exemption. This will create a hardship to homeowners who have to move inside that five-year window
The tax reform plan would do more harm than just that, it would also eliminate a multitude of other homeownreship incentives including:
- the deduction for state and local income or sales tax
- the Mortgage Interest Deduction for second homes
- the deduction for moving expenses
- the deduction on student loan interest
Millions of middle class homeowners would see a tax hike under this plan. While NAR is supportive of comprehensive tax reform, America's homeowners should not pay for corporate tax cuts. In another blow to the middle class, homeowners could lose substantial equity from the more than 10% drop in home values likely to result if the bill is enacted.
You can help stop this attack on homeownership by responding to NAR's Call For Action by clicking the button below. Make your voice heard and don't let Congress pass tax reform on the backs of American homeowners.
Additional Articles on the House GOP Tax Plan Release
- How GOP Tax Plan Could Hobble the Housing Market - Fox News
- GOP Tax Plan Delivers Mixed Results for Corporate America - Washington Post
- Realtors Launch Blitz to Block Tax Proposals - Wall Street Journal