Tax reform impact on CA housing market (loans, big house)

[BeauCharles]

While I know many people who benefit and I'm glad for them, its always made me wonder why the government should be subsidizing your purchasing decisions, marital status or reproductive choices with tax breaks.

[majoun]

Originally Posted by BeauCharles

While I know many people who benefit and I'm glad for them, its always made me wonder why the government should be subsidizing your purchasing decisions, marital status or reproductive choices with tax breaks.

Homeownership is higher in Canada, the United Kingdom, and Spain than it is in the US and none of those nations subsidize it as much, not even Canada.

[Hopeful for Life]

Originally Posted by LuvSouthOC

Most new mortgages in Coastal CA are likely over 500k. The proposed cap for mortgage interest deductions to 500k will probably negatively impact the housing market all over coastal CA.

https://www.google.com/amp/s/www.cnb...n-in-half.html

They should leave it at $500,000, but they also need to lower that amount for low cost housing metropolitan areas. It’s unfair to those ppl in those places when compared to low cost areas around the country. I’ve never understood why Californians don’t really receive added tax breaks for living in an uber-expensive State.

[phantompilot]

Originally Posted by LuvSouthOC

Most new mortgages in Coastal CA are likely over 500k. The proposed cap for mortgage interest deductions to 500k will probably negatively impact the housing market all over coastal CA.

https://www.google.com/amp/s/www.cnb...n-in-half.html

Yah, but it can't affect it that much.

Look at the effective tax rates - say you owe a lot of tax, you might pay 20% effective federal taxes. So, okay, lets say for a mortgage of 750K, you then have 250K in mortgage that is not tax-deductible, so if you pay 5% for your loan (not now but eventually it will probably average that over the 20 or 30 year period including right now), then you are paying a total of roughly 12,500 in interest. Well, that's only an impact of $2500/year.

Is that really enough extra expense to change the behavior of a person that can take out a mortgage for 750K? And, the more you pay the less likely the extra tax is to change your behavior! That's the interesting thing about this kind of a situation. Those who will "Suffer" the most are the least likely to be affected by these numbers.

[davidt1]

Too much welfare and entitlement state of mind in the populace these days.

[expatCA]

Originally Posted by Hopelesscause

They should leave it at $500,000, but they also need to lower that amount for low cost housing metropolitan areas. It’s unfair to those ppl in those places when compared to low cost areas around the country. I’ve never understood why Californians don’t really receive added tax breaks for living in an uber-expensive State.

They do not have to live there, they usually make more money and people should pay the at the same level regardless of where they live. It is a choice, not a requirement, to live anywhere.

[CaliRestoration]

Originally Posted by Hopelesscause

They should leave it at $500,000, but they also need to lower that amount for low cost housing metropolitan areas. It’s unfair to those ppl in those places when compared to low cost areas around the country. I’ve never understood why Californians don’t really receive added tax breaks for living in an uber-expensive State.

If you want a lower tax burden, then lower the state tax burden. California is Top 3 in the country.

Next time you're at the voting booth and want to vote for a tax levy, think very hard about it because it actually does have an effect on your pocket.

[expatCA]

Originally Posted by CaliRestoration

If you want a lower tax burden, then lower the state tax burden. California is Top 3 in the country.

Next time you're at the voting booth and want to vote for a tax levy, think very hard about it because it actually does have an effect on your pocket.

Many think it will impact someone else' pocket.

[payutenyodagimas]

Originally Posted by CaliRestoration

If you want a lower tax burden, then lower the state tax burden.

why not the federal tax?

[CaliRestoration]

Originally Posted by payutenyodagimas

why not the federal tax?

Uh, the Federal tax is going to go down for a lot of people actually.

By far the largest tax burden is being imposed by the State if you live in California.

You're looking at the mole hill, when the mountain is about to swallow you.