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Will the New Tax changes + other stuff = slower home appreciation?

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  • Dont_know_mind
    replied





    removes 1031 exchanges to pay for 50-100% CGT relief on primary residences. 
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    How many people pay CGT on sale of primary residences? Right now, you’re given $250,000 tax free ($500,000 married) so it’s a very small percentage.

    I would love to see 1031 Exchanges go away though. They have made no sense to me. Why can’t I do that going from one stock to another? Hahaha
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    I am a bit worried I will pay CGT on my primary residence when I sell it.

    It's not hard to get 500k appreciation on even a 1M place over a decade. It may affect more people than you think. Maybe even you, unless your house is less than 500k.

    Leave a comment:


  • ITEngineer
    replied


    removes 1031 exchanges to pay for 50-100% CGT relief on primary residences.
    Click to expand...


    How many people pay CGT on sale of primary residences? Right now, you're given $250,000 tax free ($500,000 married) so it's a very small percentage.

    I would love to see 1031 Exchanges go away though. They have made no sense to me. Why can't I do that going from one stock to another? Hahaha

    Leave a comment:


  • Dont_know_mind
    replied
    Barely moves the needle.

    As StarTrekDoc says, perhaps is a mild nudge to lower/middle prices property

    What would put a rocket under the residential housing market would be Trump getting kicked out and being replaced with a leftie who removes 1031 exchanges to pay for 50-100% CGT relief on primary residences.

    Leave a comment:


  • DCdoc
    replied
    As they say in real estate, everything is local. We live in PA right at the border with NJ. Like >50% of the people in our area, we work in NJ. There are huge numbers who commute from our area to Princeton and similar NJ areas. We, like them, have chosen to live in PA to avoid paying NJ income tax (reciprocity exists so you pay taxes based on where you live, not work). With the SALT limitation it will be more expensive to live in NJ, vs an area where we live which is an incredibly simple commute there. So I expect in this border area, over time, for there to be a net efflux from NJ to surrounding communities with lower areas for income/property tax. The government is no longer subsidizing high tax stages. In areas like this, where choices exist for choosing a residence in either state, I expect housing prices here to increase and bordering NJ communities to decrease, particularly at the higher end. I’m sure many other similar situations exist (WA and OR?).

    Leave a comment:


  • Molar Mechanic
    replied
    Edit: Right comment, wrong thread.

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  • ENT Doc
    replied













    More than happy to see the mortgage interest and real estate taxes limited.  No reason for the government to be propping up a specific industry, especially given the mountain of debt we have.  I agree that the tax law will be modified – probably sooner than the sunset provisions inherent to the law.  Raising the corporate rate back would be pure stupidity IMO.
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    Depends where they raised it to. 25% would be fine, applied to all not just mega corps, etc…
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    You want business and investment here.  Reduce the rate to something modest that supports governmental protections and regulations necessary for C-corps, and assess the additional tax to make up for the losses at the individual level (dividend and cap gains taxes, for example).  Taxing businesses when tax is or can be assessed at the individual level is nothing more than a money grab and decreases investment/growth.
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    If everything was treated as pass through that’d be great and seemingly simple(?).
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    Not exactly a pass through, but something closer to that.  C-corps have more costly requirements to the government/taxpayer, such as liability protection, bankruptcy protections, needing the SEC to be more involved, etc.  Charge them whatever marginal cost they create in the system.  Obviously, there should be other taxation based on externalities different companies create that they're not assessed now, but I think that too is best addressed at the individual level.

    Leave a comment:


  • StarTrekDoc
    replied
    Pockets as in -- All California, Metropolitan areas in Tx, NW, SW, East coastline, and most of FL, right?    A lot middle class home owners in HCOL areas that will be pushed into rentals as Dusn mentioned.  This will push rental style home appreciation much higher --- so entry level homes in all these areas will appreciate nicely and as rental real estate in SFH will tighten with landlords instead the American dream.

    Leave a comment:


  • bean1970
    replied
    for the average American, their mortgage deduction didn't even exceed the standard deduction even when it was at 12K for MFJ, even more so as years go by and there is more principal and less interest on people's mortgages. We as physicians have skewed view because we tend to live in higher priced homes with heftier mortgages. As a whole i doubt the housing market has any direct relation to the taxes, more so for interest rates on the loan itself and just generally cyclical trends.  other than few geographic pockets here and there, the entire home appreciation is somewhat of a myth IMO...by the time one adds in every single cost they dumped into a home over the time they live in it (interest, taxes, insurance, yard care, upkeep, painting, gutter cleaning, replacing appliances, on and on)....it probably is a money suck and appreciation is slow at best.
    i would hedge it will slow more from upcoming homebuyers riddled in debt along with valuing "experiental" matters (whatever makes a good Instagram post) rather than material things and the ability to be more mobile. If they do want a home, they will want something green and efficient...not a giant doctor house. At least this what i see with my kid and his college friends and many of the newer medical students and how they see their futures, mostly without any interest in home buying as a long term goal.

    Leave a comment:


  • Dusn
    replied
    It shifted my rent vs buy calculator strongly to the rent side. So I decided to continue to rent instead of buying a home this past year and likely will continue to do so.   I'm not sure what percent of the public actually pays attention to their finances/taxes like this though.

    Leave a comment:


  • Zaphod
    replied










    More than happy to see the mortgage interest and real estate taxes limited.  No reason for the government to be propping up a specific industry, especially given the mountain of debt we have.  I agree that the tax law will be modified – probably sooner than the sunset provisions inherent to the law.  Raising the corporate rate back would be pure stupidity IMO.
    Click to expand…


    Depends where they raised it to. 25% would be fine, applied to all not just mega corps, etc…
    Click to expand…


    You want business and investment here.  Reduce the rate to something modest that supports governmental protections and regulations necessary for C-corps, and assess the additional tax to make up for the losses at the individual level (dividend and cap gains taxes, for example).  Taxing businesses when tax is or can be assessed at the individual level is nothing more than a money grab and decreases investment/growth.
    Click to expand...


    If everything was treated as pass through that'd be great and seemingly simple(?).

    Leave a comment:


  • StarTrekDoc
    replied
    It will slow high end/VHCOL cost appreciation as the cap will do that.   BUT, it will also inflate the middle and lower end as the SALT limits in combination of a higher standard will squeeze out the middle class dream of home ownership.

    Subsequently, the rental market will have higher demands, pushing up rents.  Making the profit margins for landlords a bit better and incentivizing folk into rental real estate -- and causing appreciation valuations in that market of SFH/duplexes especially in my opinion.

    Plus you get the tax relief on profits for LLC real estate -  it's relatively easy to keep under 300k with depreciation markers -- it'll be a boon for rental landlords.  --  So it's a mixed answer on home appreciation.

    Entry level homes will get more expensive.   High end ones will plateau. --- middle class renters will be the losers on all this.

    Leave a comment:


  • MPMD
    replied




    How many people did this apply to in the first place? Not many. As for the capping its at 750k, which still includes most of the homes in america and is only 250k from the limit prior. Those limits never stopped people from buying more expensive homes anyway, so I dont think it will change much. Theres a couple years where its different, than it will simply be the way it is and no one will think much about it.

    Lots of people have no idea whats going on with their taxes and likely most of the people who casually toss around the ‘tax breaks’ from mortgage/etc…were never getting them in the first place as they couldnt itemize.

    For the people that could, its a rather small change, but in certain locales the SALT change does hurt a bit. But people buying fancy houses in fancy places werent doing it for tax reasons in the first place. Also you have the AMT offset and while people may whine about it, lots of calculations seem to imply its a wash. We’ll see after everyone files I guess.
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    As someone who lives in (relatively not locally) fancy house in a relatively fancy place, well said!

    Leave a comment:


  • ENT Doc
    replied







    More than happy to see the mortgage interest and real estate taxes limited.  No reason for the government to be propping up a specific industry, especially given the mountain of debt we have.  I agree that the tax law will be modified – probably sooner than the sunset provisions inherent to the law.  Raising the corporate rate back would be pure stupidity IMO.
    Click to expand…


    Depends where they raised it to. 25% would be fine, applied to all not just mega corps, etc…
    Click to expand...


    You want business and investment here.  Reduce the rate to something modest that supports governmental protections and regulations necessary for C-corps, and assess the additional tax to make up for the losses at the individual level (dividend and cap gains taxes, for example).  Taxing businesses when tax is or can be assessed at the individual level is nothing more than a money grab and decreases investment/growth.

    Leave a comment:


  • Zaphod
    replied




    More than happy to see the mortgage interest and real estate taxes limited.  No reason for the government to be propping up a specific industry, especially given the mountain of debt we have.  I agree that the tax law will be modified – probably sooner than the sunset provisions inherent to the law.  Raising the corporate rate back would be pure stupidity IMO.
    Click to expand...


    Depends where they raised it to. 25% would be fine, applied to all not just mega corps, etc...

    Leave a comment:


  • ENT Doc
    replied
    More than happy to see the mortgage interest and real estate taxes limited.  No reason for the government to be propping up a specific industry, especially given the mountain of debt we have.  I agree that the tax law will be modified - probably sooner than the sunset provisions inherent to the law.  Raising the corporate rate back would be pure stupidity IMO.

    Leave a comment:

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