Tax Plan Would Hit Eastside Homebuyers Hard
The proposed Republican tax plan would reduce itemized mortgage-tax benefits for new owners of expensive homes. Unfortunately, that would apply to the typical house selling today in our area.
The proposal, according to The Seattle Times, “would cap the federal mortgage-interest deduction at $500,000 for new-home purchases, down from the limit of $1 million.” New homeowners would only be able to deduct the first $500,000 of their mortgage. Across the U.S., this wouldn’t affect most Americans. But in pricier areas like greater Seattle, this would affect the majority of new homeowners.
Windermere Real Estate’s chief economist Matthew Gardner foresees two impacts from this plan: First, homeowners may be less likely to sell since they have their grandfathered tax plan. This would affect the consistently low inventory issue our region has been facing for quite some time. Second, buyers would rush to purchase homes before the tax plan would be passed, which would increase demand.
All of this being said, Gardner doesn’t expect this plan to be passed before the end of the year.
Read more of the proposed plan’s details and insight from Matthew Gardner in the original article.