NAR (National Association of REALTORS®) is projecting a 1-3% growth in home values in 2018 but says that in areas with higher housing costs there could actually be a decline in value. Why is that?
The new tax law limits the state (and local) income tax and property tax deductions to $10,000 total. That will definitely have a big impact in higher property value areas. For example, a property valued at about $800,000 could expect to pay about $10,000 in property taxes leaving no “room” for a state and local income tax deduction.
There are also changes in the amount of mortgage interest that can be deducted, but for loans originated before the end of 2017 and closed before April 1, 2018, they get a pass. Again, these changes generally affect higher property values.
Want more info? This article from Market Watch has more details and a nifty calculator at the end that can give you an idea of your 2017 tax hit. Check it out.
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