Trump Tax Reform and Home Prices

[Kangen.Irvine]

Maybe getting rid of the SALT deduction would encourage Californians to finally question all of the taxation in this state and why all of the money collected in the state doesn?t seem to go as far as people would hope.

 

[eyephone]

so what's going on with this issue? if i remember correctly some sort of a tax plan was passed couple days ago. any legitimate news other than fake news?

A budget resolution was passed by the Senate (50-50 + tie breaker vote by Pence). This opens the door for the reconciliation process where Congress comes up with a bill that then would only need 51 votes in the Senate to be approved. Without reconciliation it would have taken 60 votes which would have needed bi-partisan support. Congress is currently coming up with their bill and not much is known about it at all. Initial talks were about doubling the standard deduction, getting rid of state and local tax exemptions, getting rid of the estate tax, reduction of incremental tax rates, lowering of the corporate tax, limits on 401k plans, taxation of employer provided health insurance, $1.5tn deficit. CA/NY/NJ are opposed to getting rid of state and local tax exemptions and if they decide to not support the bill, it could not pass a vote in Congress. Let's see how much our representatives care about the fact that we'd be paying more in taxes.

It?s a middle class increase nationwide

 

[Ready2Downsize]

Maybe getting rid of the SALT deduction would encourage Californians to finally question all of the taxation in this state and why all of the money collected in the state doesn?t seem to go as far as people would hope.

Exactly. The mello being collected on the newer homes is absolutely ridiculous. Look at other new areas with lower prices and the mello is the same percent of the home's price. How much more can it possibly cost to build a road and schools in Irvine than those lower cost areas? The only reason it happens is because FCB don't seem to care.

NO reason taxes in Irvine area should ever go up with how much is being collected on those new homes. And mello has no real accountability.

 

[zubs]

Although I dislike taxation, I have noticed the places with high mello have nicer looking neighborhoods...like Bacon Park.

 

[usctrojancpa]

Although I dislike taxation, I have noticed the places with high mello have nicer looking neighborhoods...like Bacon Park.

Mello Roos keeps the riff raff away, huh?  haha

 

[Loco_local]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

 

[hello]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

I assume many Irvine buyers will be in the following category:  500K less deducted at 4% mortgage interest rate at 35% tax rate will be about 7000 less saved on taxes?  A month change of almost 600 a month.  That will definitely hit housing prices.

 

[Ready2Downsize]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

lol!

Still has to pass the other chamber without changes but it grandfathers in those with mortgages from $500-$1M, doubles standard deduction (eliminates state income tax and exemptions which is a bit of a bummer but oh well), keeps 401K, limits property tax deductions to $10K but eliminates AMT.

So if you have a house now with the higher mortgage, and were subject to AMT, eliminating your SALT deductions, you now get a higher standard deduction and $10K in property tax deduction you weren't getting.

Seems like you got a good deal.

FCB could care less about any of this. They'll just keep buying those expensive homes and Irvine prices ain't taking any hit on this.

 

[eyephone]

?A study commissioned by the National Association of Realtors had found that the combination would lower the value of the average home by 10%.

"Even though they're technically not touching the home mortgage interest deduction, the reality is they're going to gut the mortgage interest deduction," said Gerald H. Howard, CEO of the home builders group. "Doubling the standard deduction would mean only the wealthiest homeowners would be able to take the mortgage interest deduction."

Howard said his group was pitching a tax credit that would let middle-class homeowners reduce taxable income by 12% of what they paid in mortgage interest and property taxes. The benefit would have been capped at mortgages of $500,000 and property taxes of $5,500, and there would have been a phase-out for high-income taxpayers.?
https://www.google.com/amp/s/amp.usatoday.com/story/813085001/

 

[peppy]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

lol!

Still has to pass the other chamber without changes but it grandfathers in those with mortgages from $500-$1M, doubles standard deduction (eliminates state income tax and exemptions which is a bit of a bummer but oh well), keeps 401K, limits property tax deductions to $10K but eliminates AMT.

So if you have a house now with the higher mortgage, and were subject to AMT, eliminating your SALT deductions, you now get a higher standard deduction and $10K in property tax deduction you weren't getting.

Seems like you got a good deal.

FCB could care less about any of this. They'll just keep buying those expensive homes and Irvine prices ain't taking any hit on this.

What's your assumption on income for this to be a good deal? And I guess deficits don't matter anymore ...

 

[Ready2Downsize]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

lol!

Still has to pass the other chamber without changes but it grandfathers in those with mortgages from $500-$1M, doubles standard deduction (eliminates state income tax and exemptions which is a bit of a bummer but oh well), keeps 401K, limits property tax deductions to $10K but eliminates AMT.

So if you have a house now with the higher mortgage, and were subject to AMT, eliminating your SALT deductions, you now get a higher standard deduction and $10K in property tax deduction you weren't getting.

Seems like you got a good deal.

FCB could care less about any of this. They'll just keep buying those expensive homes and Irvine prices ain't taking any hit on this.

What's your assumption on income for this to be a good deal? And I guess deficits don't matter anymore ...

Deficits? I'm talking about taxpayers who WERE subject to the AMT that also have a mortgage over $500K.

Doesn't matter what income level.

CURRENTLY AMT means NO property taxes are deductible for those folks.

Increased standard deduction plus $10K in property tax deduction should just about cover those property taxes they currently get no deduction for.

Probably means anyone with a higher priced mortgage won't want to move which tightens up supply.

Not going to hurt Irvine home princes in the least.

 

[Ready2Downsize]

?A study commissioned by the National Association of Realtors had found that the combination would lower the value of the average home by 10%.

"Even though they're technically not touching the home mortgage interest deduction, the reality is they're going to gut the mortgage interest deduction," said Gerald H. Howard, CEO of the home builders group. "Doubling the standard deduction would mean only the wealthiest homeowners would be able to take the mortgage interest deduction."

Howard said his group was pitching a tax credit that would let middle-class homeowners reduce taxable income by 12% of what they paid in mortgage interest and property taxes. The benefit would have been capped at mortgages of $500,000 and property taxes of $5,500, and there would have been a phase-out for high-income taxpayers.?
https://www.google.com/amp/s/amp.usatoday.com/story/813085001/

So the realtors say.

If in fact this does happen........................... we all get to have our property taxes lowered.

I think not going to affect Irvine one bit.

Rates have bumped up, Irvine homes just keep rising.

Mello gone thru the roof, Irvine homes just keep rising.

If they drop, there will be plenty of buyers who could care not one iota about property tax/mortgage deductibility and back up they go.

 

[eyephone]

?A study commissioned by the National Association of Realtors had found that the combination would lower the value of the average home by 10%.

"Even though they're technically not touching the home mortgage interest deduction, the reality is they're going to gut the mortgage interest deduction," said Gerald H. Howard, CEO of the home builders group. "Doubling the standard deduction would mean only the wealthiest homeowners would be able to take the mortgage interest deduction."

Howard said his group was pitching a tax credit that would let middle-class homeowners reduce taxable income by 12% of what they paid in mortgage interest and property taxes. The benefit would have been capped at mortgages of $500,000 and property taxes of $5,500, and there would have been a phase-out for high-income taxpayers.?
https://www.google.com/amp/s/amp.usatoday.com/story/813085001/

So the realtors say.

If in fact this does happen........................... we all get to have our property taxes lowered.

I think not going to affect Irvine one bit.

Rates have bumped up, Irvine homes just keep rising.

Mello gone thru the roof, Irvine homes just keep rising.

If they drop, there will be plenty of buyers who could care not one iota about property tax/mortgage deductibility and back up they go.

The CEO of the national association of home builder group says other wise.

Who am I to argue with the person who represents home builders?

 

[peppy]

I am loving what I'm hearing about the new tax plan. Middle class families of 4 making $60,000 will get a $1,000 raise so they can fix up their house. This will be good for Irvine property values especially in the older neighborhoods where houses need a little bit of work. Also since the interest deduction will be capped at 500k, people will stop buying those overpriced new homes and buy older ones so they can utilize their tax cut.

lol!

Still has to pass the other chamber without changes but it grandfathers in those with mortgages from $500-$1M, doubles standard deduction (eliminates state income tax and exemptions which is a bit of a bummer but oh well), keeps 401K, limits property tax deductions to $10K but eliminates AMT.

So if you have a house now with the higher mortgage, and were subject to AMT, eliminating your SALT deductions, you now get a higher standard deduction and $10K in property tax deduction you weren't getting.

Seems like you got a good deal.

FCB could care less about any of this. They'll just keep buying those expensive homes and Irvine prices ain't taking any hit on this.

What's your assumption on income for this to be a good deal? And I guess deficits don't matter anymore ...

Deficits? I'm talking about taxpayers who WERE subject to the AMT that also have a mortgage over $500K.

Doesn't matter what income level.

CURRENTLY AMT means NO property taxes are deductible for those folks.

Increased standard deduction plus $10K in property tax deduction should just about cover those property taxes they currently get no deduction for.

Probably means anyone with a higher priced mortgage won't want to move which tightens up supply.

Not going to hurt Irvine home princes in the least.

Most likely my taxes will be higher or at best about the same while at the same time blowing up the deficit by $1.5tn over the next decade.

 

[Ready2Downsize]

Mine may go up as well since I can't claim state income tax, have no mortgage and my property taxes are well under the standard deduction.

I wasn't talking about one person though, just the small group of people who are subject to the AMT and currently have a mortgage over $$500K.

Sad to see we had a balanced budget and now it's being blown up. Oh wait................ I think I might be wrong on the balanced budget. Seems like it's been way out of control for at least a month.

 

[lnc]

Ok, the mortgage interest deduction will be preserved for existing mortgages up to $1M but capped at $500,000 for newly purchased homes.

But what about refinance?  If a homeowner had a existing $500k-$999K mortgage but want to refinance, does that means they will lose the interest deduction after the refinance?

So either pay down and refinance only up to $500k or no more refinance in order to keep mortgage interest deduction. 

This will have an impact on the $500k-$999K mortgage refinances. 

 

[morekaos]

It's as if they wrote this law with me in mind...my taxes will likely go down!!

 

[sgip]

If this passes.... anyone notice the one thing that will likely keep OC values high?

Broadcom would re-relocate HQ from Singapore to the US (assuming that means Irvine) Could be San Jose only, but they likely still have some property here.

[url]http://www.latimes.com/politics/la-na-pol-gop-tax-cuts-20171102-story.html[/url]

I do so love the LA Times pushing agendas as in "Critics say the tax bill is skewed heavily toward businesses and the wealthy". Let me rewrite this for them.... "Leftists say the tax relief plan is tilted too far towards favoring job creators, employers and capitalists".

My .02c

 

[rickr]

I have come to realize my higher tax burden will probably be offset by my company's stock option plan and elevated stock price since we will be paying a much lower tax rate pushing our PE ratio down.

Well, at least I hope it works that way.

 

[peppy]

I have come to realize my higher tax burden will probably be offset by my company's stock option plan and elevated stock price since we will be paying a much lower tax rate pushing our PE ratio down.

Well, at least I hope it works that way.

I'm hoping for that too, but don't think it will be due to any change in corporate taxation but rather in the tax reductions overall making their way into the stock market. At least, short term it may bump it up while the deficit blows up.