From National Association of REALTORS:
Millions of Middle-Income Homeowners Stand to Lose Under “Big 6” Tax Proposal
WASHINGTON (September 27, 2017) – A group of legislators and administration leaders known as the “Big 6” today released an outline for comprehensive tax reform that if enacted, according to the National Association of Realtors®, could lead to a tax on homeownership for millions.
According to the Big 6’s framework for tax reform, changes to the current tax code would eliminate important provisions, such as the state and local tax deduction, while nearly doubling the standard deduction and eliminating personal and dependency exemptions. NAR believes the result would all but nullify the incentive to purchase a home for most, amounting to a de facto tax increase on homeowners, putting home values across the country at risk and ensuring that only the top 5 percent of Americans have the opportunity to benefit from the mortgage interest deduction.
NAR President William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties said that the proposal reaffirms Realtors,® concerns from earlier in the year and urged lawmakers to keep homeowners in mind as they proceed with comprehensive tax reform with the following statement:
“We have always said that tax reform – a worthy endeavor – should first do no harm to homeowners. The tax framework released by the Big 6 today missed that goal.
“This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions.
“When combined with the elimination of the state and local tax deduction, these efforts represent a tax increase on millions of middle-class homeowners. That tax increase flies in the face of a reform effort ostensibly aimed at lowering the tax burden for Americans. At the same time, the lost incentive to purchase a home could cause home values to fall.
“Plummeting home values are a poor housewarming gift for recent homebuyers and a tremendous blow to older Americans who depend on their home to provide a nest egg for retirement.
“Congress can still score a win for American families by promoting lower rates and comprehensive reform that doesn’t single out homeowners for a tax hike, while also preserving important investment incentives like 1031 like-kind exchanges. We look forward to continuing the discussion in the weeks and months ahead.”
From the National Association of Home Builders (NAHB)
WASHINGTON (September 27, 2017) Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas, issued the following statement on the tax plan put forth by the White House and GOP congressional leaders:
“NAHB commends President Trump and Congress for making the vital issue of tax reform a top priority. During the past several months, we have conveyed our views and concerns to policymakers and we firmly believe that the plan unveiled today represents a positive step in the right direction.
“By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth. More importantly, the blueprint maintains the Low Income Housing Tax Credit, the most indispensable tool to help produce affordable rental housing. The plan also retains a business interest deduction for small businesses, which would ensure that our future tax code is truly pro-growth.
“On an issue of such significance, we recognize difficult trade-offs must be made. Although the mortgage interest deduction remains untouched, its effectiveness could be diminished as more families elect to take a higher standard deduction. As the process advances, NAHB looks forward to working with policymakers to mitigate any detrimental effects that this development could have on the housing market. In addition, we will also seek to ensure that tax relief efforts put more money into the pockets of hard-working families and that affordable homeownership and rental housing opportunities remain an accessible goal.”
Currently, about 30 million taxpayers claim the mortgage interest deduction, with about $70 billion in total claims, according to Robert Dietz, an economist with the National Association of Homebuilders.
“I don’t think I would call that a cakewalk,” said Jerry Howard, the leader of the NAHB. He says the proposal will face fierce resistance from his group, which represents 130,000 builders.
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