November 8, 2017

First-Time and Bay Area Homebuyers Have Much to Lose From Proposed Tax Changes

Pacific Union Chief Economist Selma Hepp offers her expert perspective on the potential impacts of the changes.

Executive Summary:

  • Proposed tax changes that impact individual ownership of real estate include:
    • Eliminating deductions for state and local income taxes
    • Lowering the cap on mortgage interest deductions on newly issued loans totaling no more than $500,000, down from the current $1 million
    • Ending deductions on second homes or vacation homes
    • A new cap of $10,000 on property tax deductions
    • Limits to the capital-gains exemption used by homeowners when they sell
  • The impact would be particularly severe for households with incomes between $100,000 and $200,000 — 30 percent of Bay Area households; though most income groups stand to lose.
  • Limiting the mortgage interest deduction to $500,000 impacts 70 percent of Bay Area home sales.
  • Buyers with a new mortgage of $1 million would lose $20,000 in deductible mortgage interest in the first year.
  • Putting caps on new buyers and placing further limits on capital-gains exemptions would discourage current homeowners from selling, further intensifying the inventory shortages that are plaguing the region.

 

To read the full analysis, click here: http://pacunion.us/2zpGLK6


About The Mark Company

The Mark Company is one of the nation’s premier urban residential marketing and sales firms. Founded by Alan Mark in 1997, The Mark Company provides a full range of core consulting services including analytics, design, marketing and sales for urban high-rises and suburban attached properties throughout the Western United States. The firm is a trusted partner to global leaders in residential development and finance, providing buyer-driven sales and marketing strategies that produce industry-leading results. The Mark Company has represented more than 10,000 residences and generated over $5 billion in sales for some of the nation’s most notable and successful developments including The Infinity in San Francisco, Evo in Los Angeles and The Martin in Las Vegas. Current projects include 181 Fremont Residences and The Austin in San Francisco and Cavalleri in Malibu. The Mark Company is a subsidiary of San Francisco-based Pacific Union International, the eighth-largest residential real estate brokerage in the U.S. based on 2016 sales volume of $10.15 billion. Pacific Union merged with Los Angeles-based brokerages John Aaroe Group in December 2016 and Partners Trust in August 2017. This strategic business collaboration links four of the strongest residential real estate firms on the West Coast, supporting combined 2016 production of $12.6 billion by 1,400 real estate professionals in 47 offices throughout California. For more information, please visit www.themarkcompany.com.