Congressional "Tax Reform" Bill Dramatically Weakens Homeownership Incentives.
Act Now! We’re Almost Out of Time!
C.A.R. and NAR continue to strongly OPPOSE the Congressional "Tax Reform" bill that is being considered in Congress. C.A.R. opposes the proposal because it dramatically weakens the tax incentives for homeownership. The Senate may vote on this as soon as this week. The House could vote on the final version of the bill as soon as early next week.
Action Items:
1. Ask your Representative to OPPOSE this proposal because it dramatically weakens tax incentives for owning a home
2. Ask the agents in your office to respond too!
C.A.R. OPPOSES the Congressional "Tax Reform" bill Because:
We must reverse the decline in California’s homeownership rate. For over 100 years Congress has incentivized homeownership with the tax code; currently through the mortgage interest deduction. Any effort at reforming the tax code should maintain and prioritize this incentive. The current proposal only pays lip service to incentivizing homeownership. The proposed changes will result in only top earners itemizing their deductions. Therefore, the vast majority of people will no longer receive any tax incentive to purchase a home. So, while the proposal keeps the mortgage interest deduction, the incentive effect of the deduction for Americans to become homeowners disappears.
The Congressional "Tax Reform" bill weakens the mortgage interest deduction.
- It caps the mortgage interest deduction to the interest on a mortgage principle of $500,000.
- Homeowners would no longer be able to deduct the interest they pay on home equity loans.
- The deductibility would be eliminated for second homes and limited to loans on a family’s primary residence.
Families build wealth through homeownership. According to a report by the Federal Reserve in 2016, homeowners amassed wealth at a greater rate than renters. Renters had a median net worth of $5,200 while homeowners had a net worth of $231,400.
Tax Reform Disproportionately Hurts Californians. California is already a “donor” state, paying more in tax revenues to the federal government than it gets back. As a matter of fact, California ranks 42nd out of 50 states in the amount of federal spending per capita in the state. Now, without being able to fully deduct their state and local taxes, Californians will shoulder even more of the federal tax burden.
Here’s What Else the Bill Does:
- Extends the qualification for capital gains exclusion from two years to five years for primary residences.
- Caps the property tax deduction at $10,000.
- Taxpayers won’t be able to deduct their student loan interest.
- Medical expenses won’t be deductible.
- Many small businesses won’t benefit. A Lot of small businesses that are classified as professional service providers won’t be able to get the lower corporate tax rate.
For More Information
Contact Sean Bellach at seanb@car.org
