Republicans announced their new tax plan, the Tax Cuts and Jobs Act, last week, and the National Association of REALTORS® (NAR) says that it “appears to confirm many of our biggest concerns.”
“The proposal being debated is a clear and present danger to our businesses, to homeownership, and to our communities,” said Kevin Sears, NAR’s vice president of government affairs.
NAR has issued a call to action asking members to warn their congressional representatives about the threats the tax proposal poses to the real estate industry. NAR President-elect Elizabeth Mendenhall said issues such as tax reform lend more urgency to the mission of the REALTOR® Party. In that vein, Mendenhall and newly appointed NAR CEO Bob Goldberg announced that a presidential advisory group tasked with reviewing the successes of the REALTOR® Party recommends expanding its budget. “In many ways, the REALTOR® Party is our lifeline,” Mendenhall said. “With issues like tax reform looming, not only in our nation’s capital but in state capitals across the country, it’s time to up our ante in issue and candidate advocacy.”
The bill, H.R. 1, would cap the mortgage-interest deduction on new home sales at $500,000 (currently the cap is $1 million for couples filing jointly).
Some experts fear the increase in the standard deduction, which the new plan increased from $12,000 to $24,000 per household, could hit Californians hard.
The California Association of REALTORS® (C.A.R.) outlines parts of the plan that will impact the real estate industry:
Lowers the mortgage interest deduction cap from $1 million to $500,000
Eliminates the mortgage interest deduction on second homes
Homeowners would longer be able to deduct the interest on home equity loans
Eliminates state and local income tax deductions
Caps property tax deductions at $10,000
Extends the qualification period for exclusion of capital gains tax on the sale of a primary home from two out of the last five years to five out of the last eight years