WASHINGTON (WCMH) – The National Association of Realtors fears the Republican tax reform plan could drive down the value of your home.
The association says home values could drop 10 percent if the Senate or House tax reform bill is signed into law.
“It will lead to a renter nation and away from an owner nation,” said NAR Chief Economist Lawrence Yun.
The National Association of Realtors said doubling the standard deduction means fewer people will itemize and use the mortgage interest deduction. Yun said that will give people less incentive to buy a home.
“We know that over long period renters do not accumulate wealth, so it would not be good for the country,” said Yun.
Republicans argue doubling the standard deduction will put more money in taxpayers’ pockets.
“We want to make sure we lift some of the burden, by letting you keep more of your hard-earned money,” said Republican Senator Tim Scott.
Yun said states in expensive regions of the country will be hit the hardest, because more people itemize and take advantage of the mortgage interest and property tax deductions.
Yun said he’s also concerned about the taxes homeowners pay after selling their homes.
Currently, homeowners must live in their home for two years before selling, to avoid capital gains taxes. Under the House and Senate plans, homeowners would have to live in their homes for five years.
“The government is, in essence, saying ‘stay put, don’t move around.’ That’s counter to the American way of mobility and advancement. Many people — especially military families — who have to move more frequently, or young families who find different jobs in new cities, they need to quickly move. Now the tax structure is penalizing [them],” said Yun.
The National Association of Realtors believe all these factors could send home prices tumbling.
Senator Rob Portman was at the White House talking about tax reform on Monday. NBC 4 asked Portman’s office for an interview or statement about how the tax plan could impact homebuyers.
A spokesperson sent a statement that did not mention the housing market, but said the tax reform plan will benefit the middle class and raise wages for workers.
Full statement:“We had a good meeting today and I want to thank the president for supporting our effort to deliver on the promise to cut taxes for middle-class families and reform a broken tax code I am confident that the Senate will pass this bill and we will have a good bill on the president’s desk before Christmas. Our tax code is long overdue for reform, and it’s critical we get this done to help middle-class families, to help create more jobs, and to increase wages for American workers. Under our plan, a median income Ohio family will save $2,375 annually on their tax bill that they can instead use for gas or groceries, a car payment, retirement, college savings, or a family vacation. I look forward to the debate this week and passing this bill on behalf of middle-class families.”