It’s not often that a new year brings major changes to how we’re taxed. Now that the President has signed the tax bill into law, it’s predicted to have a significant impact on the economy and thusly the real estate market.
One school of thought is that more money in Americans’ pockets means that they may accelerate their plans to buy a home. More buyers with more disposable income paired with low housing inventory might drive home prices even higher.
On the other hand, some real estate professionals think that the new tax law could dissuade buyers because the cap on mortgage interest deduction has been lowered from $1 million to $750,000. Additionally, the standard deduction has been nearly doubled, making the mortgage interest deduction less attractive.
Time will tell to see what actually happens to the real estate market.
For more information on the new tax reform bill, take a look at this article from the Journal of Accountancy.