Greatly?

I'll go out a limb and say most first time home buyers will be in the 12% tax bracket ($77K of taxable income for married filing jointly... or $100K+ of household income).

Previously they had itemized deductions including mortgage mortgage that were more than the old standard deduction ($12,700) but less than the new standard deduction ($24,000). So they previously *needed* their mortgage interest to maximize their deductions, but the new higher standard deduction eliminates that need and they get the higher deduction with or without a mortgage. Their taxes do not increase as a result, mind you, but they lose the specific benefit of a ~$10K mortgage deduction (assuming a $250K 4% loan), which used to save them $1,200 per year (which they now save even without the mortgage). You really think that the elimination of a $1200 specific tax benefit (replaced by more general benefit that yields the same result) "greatly" reduces the incentive for first time homebuyers?

I'll buy that there could be an impact. When you look at the numbers, I'm HIGHLY skeptical it's meaningful.

(In response to this post by NJHoo)

Posted: 12/20/2017 at 1:40PM

PREV NEXT REPLY

Insert a Link

Enter the title of the link here:

Enter the full web address of the link here -- include the "http://" part:

Current Thread:

Existing Home Sales figures are strong (link) -- Tuckahokie 12/20/2017 11:18AM

Yes, the best in 11 years -- VaTechie 12/20/2017 1:09PM

Check back in the next year or two after the MI deduction is reduced and -- WahooRQ 12/20/2017 11:46AM

No one buys a house for the deduction. You guys are really stretching here. ** -- SokurHoo83 12/20/2017 12:28PM

I talked my friend at 55 to do it -- VaTechie 12/20/2017 4:30PM

I believe that whether one buys, rather than continue to rent -- NJHoo 12/20/2017 1:22PM

Yes they do. I did (in part). -- WahooMatt05 12/20/2017 1:04PM

Same here. I didn't understand a thing, but I had heard that -- HoosWillWin 12/20/2017 1:20PM

The deduction increases the sale price/value of the house -- KCHoo 12/20/2017 12:50PM

The deduction still exists, it is just now smaller than the -- BocaHoo91 12/20/2017 1:05PM

The incentive to purchase that first home is greatly reduced for many ** -- NJHoo 12/20/2017 1:28PM

Greatly? -- BocaHoo91 12/20/2017 1:40PM

Granted, my adverb selection was imprecise -- NJHoo 12/20/2017 2:27PM

No, but the deduction reduces the net cost of home ownership -- 111Balz 12/20/2017 12:36PM

The home prices must fall to account for the higher net cost.. ** -- Sabremetrician 12/20/2017 1:17PM

If the higher cost tempers demand, yes. And it should -- 111Balz 12/20/2017 2:14PM

It will be interesting to see. My guess is if the economy is doing well, -- BocaHoo91 12/20/2017 12:05PM

Agree that mortgage rates should have much more direct impact. ** -- KCHoo 12/20/2017 1:04PM

I'm inclined to agree, but it's speculation and this is similar to folks -- WahooRQ 12/20/2017 12:40PM

Don't take this as defending the plan, because it morphed into -- BocaHoo91 12/20/2017 12:58PM

We will see how great it is for you when rich NYers stop buying tax shelter -- WahooRQ 12/20/2017 1:10PM

Yeah, I'll believe that when I see it. It's like the 6th -- BocaHoo91 12/20/2017 1:21PM

You mention upgrading by renovation. This bill also eliminates the -- THECZAR 12/20/2017 12:44PM

I think the housing market will hold steady throughout -- Hoojack 12/20/2017 12:25PM

That last sentence is a very good point -- WahooMatt05 12/20/2017 12:20PM

But if interest rates go up, don't housing prices fall in tandem? So the -- THECZAR 12/20/2017 12:41PM

If prices fall on what I'm buying, -- WahooMatt05 12/20/2017 12:49PM

We've become spoiled. I remember being ecstatic refinancing down to 6 1/2%. -- Hoodafan 12/20/2017 12:25PM