Monthly Archives: November 2017

Tax Reform Proposal Will Decrease New Jersey Home Values

New Jersey Home Values At Risk

Homeowners in New Jersey could see their taxes increase and their home’s value significantly decline under the current Congressional tax reform plans. The Senate, for example, would eliminate state and local tax deductions, including property taxes, and at the same time reduce your ability to benefit from the mortgage interest deduction.

Homes across New Jersey stand to lose between $20,480 and $42,400 in value under current proposals. New Jerseyans cannot afford to pay this heavy price for tax reform.

Find out here how your home’s value could decline if this harmful reform plan is enacted.

Click on the interactive map above to see how home values would change.

With a potential vote just days away, you must act today. Take Action to tell Congress to vote NO on these harmful tax reform plans. Tax reform should not be paid for on the backs of New Jersey homeowners.

Study: Middle Class Homeowners Will See A Tax Increase Next Year Under Congressional Plan

Middle Class Homeowners Will See A Tax Increase Next Year Under Congressional Plan

You’ve probably heard that the new congressional tax plan is detrimental to middle class Americans who are homeowners.

But really, how much will they be impacted?

A new study conducted by Americans Against Double Taxation (AADT) indicates that most middle class homeowners will see a tax increase next year – some as great an increase of $6,167 – and then get an additional $600 increase once the family flexibility credit expires after 2022.

The states where homeowners would feel the greatest impact include New York, New Jersey, California, Virginia, Minnesota, Utah, Pennsylvania, Ohio, Illinois and Michigan.

“The partial elimination of the state and local tax deduction (SALT) will raise taxes for many middle-class suburban homeowners even with the other changes included in the Brady tax bill,” said Bob Chlopak, Co-Director of Americans Against Double Taxation. “These tax hikes will hit both middle-class families and individuals owning homes, who have been promised for months they would get a tax cut, and will be as widespread as they are costly. The analysis makes it clear that these suburban homeowners are paying much of the $1.1 trillion tab resulting from the loss of the SALT deduction.”

The AADT study examined 39 suburban congressional districts in the aforementioned states. In 32 of those districts, the average increase would be more than $1,000 and that total would increase to 38 of 39 districts paying more than $1,000 more than they are today within six years.

In suburban Minneapolis, (MN-3) the average homeowner in ever ZIP code would see a tax increase with some as high as $2,300 annually. This is the same for middle class taxpayers who own a home in most of Northern or Eastern Virginia.

But California is one of the hardest hit states – with increases climbing over $5,500.

The reason there are differences in every state and district and even ZIP code is the elimination of SALT is only partial, making the numbers different for every homeowner.

What tends to be most disconcerting to those analyzing this proposed legislation is that the tax plan has a double standard. In the same geographic region that homeowners are eliminating or drastically reducing tax deductions on individuals and families they are allowing corporations for fully deduct state and local taxes – placing the corporate tax burden on the residents who just happen to live in the same community.

Individuals are more at stake in these areas of the country because of an increase in the child tax credit for families – but that tax credit increase will only last for five years, meaning the families will feel the impact come 2023.

Both AADT and the National Association of REALTORS® are strongly suggesting that constituents contact their Senators to tell them to oppose this legislation and to continue to do so in the future until middle class American homeowners are protected and not asked to bear a double tax burden to put more money in the coffers of corporate America.

Proposed Tax Reform Bill Would Raise Taxes For Millions of Middle-Class Homeowners

Tax Reform

Homeowners expecting a big tax cut from the tax reform proposals being considered in Washington may be in for an even bigger surprise.

According to the National Association of Realtors®, a proposal currently pending before the House of Representatives would offer little benefit to millions of middle class homeowners, while many would actually see a tax increase.

New limits on the mortgage interest deduction (MID) as well as state and local tax deductions are among the many reasons why, Realtors® say.

“After looking at this legislation, it’s not all that different from the tax reform blueprint presented by House Republicans last Spring,” said NAR President Elizabeth Mendenhall. “We support the notion of lower taxes, which this legislation promises, but not if offering them puts additional burdens on the backs of homeowners.

“If this legislation is passed, millions of middle class homeowners will experience both a tax increase and a loss in equity after home values drop as expected. That’s a combination that most middle class homeowners simply cannot afford, and they shouldn’t have to.”

Homeowners expecting a big tax cut from the tax reform proposals may be in for an even bigger surprise.Click To Tweet

NAR is opposed to the legislation for several reasons:

  • It would cut the cap on the MID in half from $1 million to $500,000 for all new mortgages and it’s not indexed to inflation, meaning the value will further diminish with time. The bill also eliminates tens of thousands of dollars in state and local tax deductions, and caps the property tax deduction at $10,000. This is of particular concern in higher-cost states, but will be felt in all 50 states across the country.
  • The bill also puts new limits on the Capital Gains Tax exemption for selling a primary residence. Currently, to qualify for the exemption, you only have to live in a primary residence for two of the previous five years. The new limit would increase that to five of the previous eight years, creating hardships for homeowners who may need to move in a shorter period of time.
  • The bill would eliminate other tax benefits such as the MID on second homes, a moving expense deduction, student loan interest deduction and deductions for medical expenses – even for the elderly.

“This is all included in a bill that we’re being told is improving our current system,” Mendenhall said. “Not only is this legislation detrimental to current American homeowners, but it will negatively impact future generations of homeowners with roughly $1.5 trillion in new federal debt.”

A big part of the tax reform legislation is a corporate tax break, reducing tax burdens for companies from 35% to 20% and for companies investing money overseas to bring their money back into the United States at a one-time-only tax rate of 12% instead of 35%.

The concept here is it would create more jobs and increase wages, however there is no guarantee that is the case and instead could end up raise dividends and buy back shares for corporate investors – all while homeowners bear the burden of paying for those corporate tax cuts.

“NAR is urging everyone to contact their U.S. Representative and tell them that this tax legislation, as currently constructed, is not good for American homeowners,” Mendenhall said. “Nobody wants to be double-taxed on the money they pay for state and local taxes – and that would be the case in all 50 states.”