BOSTON -- There's concern about the republican tax overhaul moving through Washington and its potential impact on the state's already strained housing market.
Many people looking to purchase or sell property are concerned that the bill puts home values at risk and undercuts most of the incentives to buy.
“As a realtor, I want as many people as possible to be able to afford a home in the commonwealth. This will make that more difficult,” Paul Yorkis, the head of the Massachusetts Association of Realtors, said.
For starters, new homeowners will only be able to deduct $750,000 in mortgage interest, a drop from the current threshold of $1-million.
Ouch! @nardotrealtor and @marealtors say home values could FALL as much as 14% if #GOPTaxBill passes, largely due to roll back of popular local tax and mortgage interest deductions. Anyone holding off on buying/selling? @boston25— Jacob Long (@JacobLongTV) December 20, 2017
The tax bill also places a brand-new cap for all homeowners on property and sales tax deductions at $10,000. Yorkis said that will have an impact on people looking to buy real estate locally.
“Whatever home they're looking to purchase, that incentive under this bill has disappeared,” he said.
Without incentives, potential homebuyers could stay on the sidelines longer or keep renting, Yorkis said, down home values by as much as 14 percent over time across the commonwealth.
“When tax incentives disappear, home values go down.”
That would add to the already strained housing market in Massachusetts, which is one of the most expensive states.
“Massachusetts needs more housing. We are short on inventory.”
Yorkis added that for people looking to sell, the time is good because of the low inventory and high demand.
But whatever you're doing, he recommends consulting with a mortgage broker or tax attorney first.
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