Follow Patrick Linkedin Facebook
Email Patrick Email
Financial
Nov 20, 2017

How Tax Reform Could Impact Home Ownership

Sponsored Content provided by Patrick Stoy - Mortgage Consultant/Owner, Market Consulting Mortgage

If it were possible to bet on whether the squabbling and partisanship in Washington will persist, I know where the safe money would be.  

Given that it is basically impossible to describe the political climate without mentioning the constant bickering of our leaders and their inability to find agreement on almost every topic imaginable, does anyone believe they will actually be able to get this done?

Furthermore, it should be almost common knowledge that any attack on homeownership deductions is an exercise in futility.  Regardless of party lines or political affiliations, keeping intact the section of the tax code that protects home ownership deductions is an idea everyone can get behind.

This is at least partially why the proposed tax reform is just that - a proposal. It is unlikely to pass in its current form, partly because of fierce opposition from powerful groups dedicated to protecting homeownership, such as the National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association. But it is still worthwhile to mention some of the bill’s key points.

One of the biggest issues these groups had with the House tax reform bill was it proposed moving the cap for mortgage interest deductions from $1 million to $500,000 for new home sales only.  Existing purchases are grandfathered. 

In the Senate version just recently released, however, it appears that the cap will remain at its current level of $1 million. This could be due to the negative response to the proposed change from constituents and industry groups dedicated to homeownership.

In a market such as Wilmington, capping the mortgage interest deduction on the sale of a new home priced at $500,000 or less may not seem like an attack on the middle class. In other markets - where it is barely possible to get an entry level home for that amount - the concern about the tax reform creating a negative impact on the middle class is extremely well-founded.

The reform is being characterized as taking the incentive out of homeownership, as it also places new restrictions on the capital gains tax exemption that protects homeowners from having to pay when selling a principal residence. The idea that homeownership is one of the best, most-effective, tried-and-true methods for building wealth is a widely accepted notion.

Remember the American dream of homeownership?

According to the National Association of Realtors (NAR), the level of homeownership in our country is at a 50-year low. The fact that NAR’s findings, released from a study earlier this year, show the House roadmap to reform would result in a 10 percent decrease in home values and an $815 increase in middle-class homeowners’ tax liabilities that would only exacerbate the problem.

Regardless of your level of cynicism concerning our leadership, and whether you are an elephant, donkey or something in between, it’s always worthwhile to stay informed, speak out and ensure your representatives know where you stand.  

To find out about your options and capitalize on the incredible wealth-building power of real estate, give me a call at the number below. 

Patrick Stoy (NMLS Numbers 39527 and 39166) has 18 years of mortgage lending experience. Patrick is CEO of Wilmington-based Market Consulting Mortgage, which he started in 2005 with a mission to build lifelong customer relationships by providing real value. To learn more about Marketing Consulting Mortgage, visit www.macmtg.com. Patrick can be reached at [email protected] or 910-509-7105.


 

Other Posts from Patrick Stoy

Mcm 14jan insight
Ico insights

INSIGHTS

SPONSORS' CONTENT
Carolinemontgomery4

Business Budgeting

Caroline Montgomery - Adam Shay CPA, PLLC
Burrus rob headshot 300x300

Held for Ransom(ware): You AND Your Company. How NOT to be a Victim

Robert Burrus - Cameron School of Business - UNC-Wilmington
Aaeaaqaaaaaaaaidaaaajdhiztrkodm0lte2yjetngrkmy1hotrmltawmdvlmwqyztmymw

Entrepreneurs Tap into Generous Advice

Diane Durance - UNCW Center for Innovation and Entrepreneurship

Trending News

Renting Continues To Get More Expensive In Wilmington, Data Shows

Cece Nunn - Jun 24, 2019

Medical Building In Wilmington Sells For More Than $5M

Cece Nunn - Jun 25, 2019

At Mayfaire, New Physical Therapy Facility Throws Out Insurance Model

Cece Nunn - Jun 24, 2019

Adam Sisk Promoted To Principal Engineer

Christina Haley O'Neal - Jun 25, 2019

With ILM Business Park Fully Leased, Land Still Open For Development

Christina Haley O'Neal - Jun 25, 2019

In The Current Issue

Chen Puts Final Touches On Ramen Shop

Johnny Chen, the food entrepreneur who brought sushi to downtown Wilmington more than 15 years ago with his first Nikki’s restaurant, has ag...


Software Firm Codes For Growth

After growing PS Solutions in Pennsylvania, founder Wayne Hippo came to Wilmington with the goal of replicating the company’s growth in the...


Aquarium Named Among Nation's Best

The N.C. Aquarium at Fort Fisher is among the top 10 aquariums in the country, according to a USA Today poll. Voters ranked the state’s aqua...

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Power Breakfast - The H Word (June 13, 2019)
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`
Health Care Heroes 2018