GOOD for Texans? Tax Reform Capping Mortgage Interest & Property Tax Deductions (sales, houses)

[calgirlinnc]

Originally Posted by numbersguy100

Yes, so all that has to happen for home prices and the real estate market to not to be affected is for people to magically find far more cash than they have or want to allocate to down payments so they can keep mortgage under $500k, and life will go on, right? That's an absurd contention. I'd also point out that until you get to the VERY wealthy, people who buy homes in the $650k-$1.5mm context in DFW absolutely need the mortgage interest deduction and they definitely are paying over $10k in property taxes and need that as well. Or said another way, they don't need it, but they'll definitely forgo other consumption if forced to pay more in taxes after the loss of those deductions. There's a discussion to be had about whether this is a better long term outcome for the real estate market due to the distortions current policy creates, but make no mistake there would be short term pain in that market and anyone whose income relies on the homebuilding, real estate, or mortgage industries. The issue of allowing current mortgages to deduct interest will have huge implications for the refi market as well as creating a structural barrier to people upgrading and moving to a new home, as the new property might no longer qualify for the deduction. Also most cash buyers are at high price points, and probably pay more than $10k in property taxes, so yes, it does affect them.

I wasn't discussing the feasibility of it or it's merits. I was just clarifying the proposal. So back off a little.

[calgirlinnc]

Originally Posted by BLDSoon

You can't ACTUALLY believe that can you?(POTUS will bring back prosperity for ALL Americans). For some yes, but for ALL? Isn't the position of hard right politics that prosperity for all = Communism? (or is it Socialism... what's the buzzword these days? These things go over my head sometimes )

Besides, no president can actually do that even if they wanted to. Such utopias don't exist.

My point.... that got lost apparently.... was that no "brutal dictator" ever starts out that way and almost always has the support of his countrymen at first based on mostly populist views. I can safely say that most all of them start that way, and the more egotistical they are the more likely it is that it ends that way. Thankfully we have checks and balances in the US to prevent such things from occurring. At least I hope we still do.

For the record, i'm in wait and see mode. I do not think the effect of this bill ON ME will be a negative. I do believe the removal of the credit for electric vehicles was unnecessary and is a political rather than a substantial move. Its net effect for that industry will be a negative and looking at the stock prices for those affected, the proposal already is.

I said he wants to bring back prosperity, and I hope he will be successful insofar as he can. Will it work for everybody? No, because that's not possible. But do I think he is cherry picking and saying "success for abc group, but not xyz group"? No, I don't believe that.

Whatever your point was about dictators, you were going with the sad and worn out talking point that "OMG Trump is a dictator! He's the next Hitler!" Whatever, I'm not buying.

[iberanon]

A house is for living in, NOT for investment.

[kyam11]

Originally Posted by iberanon

A house is for living in, NOT for investment.

Interesting. I just sold a house that I never lived in for one day of my life. It was bought as a pure investment. I know other people that took a portion of their portfolio and bought more house than they needed, and lived in it, as they felt it would appreciate at a higher rate than a different house. While a house can be used for living in it can also be used as an investment vehicle. By definition an appreciating asset can be bought for investment purposes.

[EDS_]

Originally Posted by BLDSoon

You can't ACTUALLY believe that can you?(POTUS will bring back prosperity for ALL Americans). For some yes, but for ALL? Isn't the position of hard right politics that prosperity for all = Communism? (or is it Socialism... what's the buzzword these days? These things go over my head sometimes )

Who in heck has ever said or implied that prosperity for all = communism or socialism? And for crying out loud those terms are not buzzwords they very well describe two well understood political+economic systems.

[EDS_]

Originally Posted by kyam11

Interesting. I just sold a house that I never lived in for one day of my life. It was bought as a pure investment. I know other people that took a portion of their portfolio and bought more house than they needed, and lived in it, as they felt it would appreciate at a higher rate than a different house. While a house can be used for living in it can also be used as an investment vehicle. By definition an appreciating asset can be bought for investment purposes.

Agreed and I'd argue that people who don't think of their primary residence as an investment vehicle are making a mistake.

[EcoDeb]

Originally Posted by numbersguy100

Yes, so all that has to happen for home prices and the real estate market to not to be affected is for people to magically find far more cash than they have or want to allocate to down payments so they can keep mortgage under $500k, and life will go on, right? That's an absurd contention. I'd also point out that until you get to the VERY wealthy, people who buy homes in the $650k-$1.5mm context in DFW absolutely need the mortgage interest deduction and they definitely are paying over $10k in property taxes and need that as well. Or said another way, they don't need it, but they'll definitely forgo other consumption if forced to pay more in taxes after the loss of those deductions. There's a discussion to be had about whether this is a better long term outcome for the real estate market due to the distortions current policy creates, but make no mistake there would be short term pain in that market and anyone whose income relies on the homebuilding, real estate, or mortgage industries. The issue of allowing current mortgages to deduct interest will have huge implications for the refi market as well as creating a structural barrier to people upgrading and moving to a new home, as the new property might no longer qualify for the deduction. Also most cash buyers are at high price points, and probably pay more than $10k in property taxes, so yes, it does affect them.

Economics and Tax Policy affect the way people spend. Say a family would have gone for the Bigger House as they would get the tax deduction for mortgage and property taxes. If they can no longer deduct these expenses, they may decide on the smaller house creating even a greater demand in the under $500K housing market, which is already crazy.

If fewer higher cost homes are sold, the local tax base will shrink this may lead to higher property taxes to the rest of us, as the difference will have to be made up in either cuts or tax increases or both.

The Construction industry sees problems with this plan too, as many custom builders and trades build homes in the targeted price range being hit $500K - $1.5M.

http://www.builderonline.com/buildin...0317%20(1)&he=

[Katana49]

I haven't seen the proposed bill in its entirety yet, but from what I hear, it will hurt me, as I currently pay over $10k in property taxes and my next mortgage will likely be for more than $500k.

Honestly, none of it really matters in the grand scheme of things when you're looking at our government's budget (or lack of one.) We spend over $1 Trillion on defense or defense related programs and agencies. It's about equal to what we spend on Medicare and Medicaid. Social Security is about $1 trillion as well, but I don't like to include that in discussions about government spending because it's one of the few things that is 100% funded through payroll taxes.

Without significantly changing spending on any of the above, tax reform is pretty much worthless IMO. You're going to make some people happier, some people madder, but the end result isn't going to amount to anything when stacked against our spending and national debt.

[BLDSoon]

Originally Posted by EDS_

Who in heck has ever said or implied that prosperity for all = communism or socialism? And for crying out loud those terms are not buzzwords they very well describe two well understood political+economic systems.

1) Lots of folks.

2) This may come as a surprise; but I’m aware of what ‘those terms’ mean. Buzzwords often do have ‘well understood’ meanings which is what makes them popularly (or overly) used to begin with.

[BLDSoon]

[quote=calgirlinnc;50017873Whatever your point was about dictators, you were going with the sad and worn out talking point that "OMG Trump is a dictator! He's the next Hitler!" Whatever, I'm not buying.[/QUOTE]

Sure, THAT’s what my point was. Smh.