Trump’s tax plan may make the mortgage tax break worthless to millions of home buyers

Only wealthy buyers will make use of the deduction: Trulia

New York /
May.May 16, 2017 10:15 AM

President Trump’s tax plan may render the country’s cherished mortgage-interest tax deduction useless to as many as 25 million Americans, according to new analysis by property-data provider Trulia.

The White House claims the average family will benefit under the Trump’s proposed reforms, with low-to-middle income households effectively getting a tax cut, Bloomberg reported. Treasury secretary Steven Mnuchin has said the administration will not do away with the mortgage break, however there are plans to raise the standard allowance from $12,700 to $24,000 for a married couple filing together, and only allow deductions for home loans and charitable donations. That means itemizing may not be valuable for average taxpayers, according to the publication.

According to Trulia’s analysis, a married couple would need a home-loan balance of approximately $608,000, before it would be worthwhile to use mortgage break. That’s an increase from around $322,000 today, according to Bloomberg. The median home price in the U.S was $232,100 last quarter.

Cities where home prices are rising rapidly will be most affected, and a drop in demand could drag values down across the country. The National Association of Realtors is against the changes, claiming it will remain in name only.

According to Mark Zandi, of Moody’s Analytics, the changes are a “backdoor way of rendering the mortgage interest deduction close to worthless.” [Bloomberg]Miriam Hall


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
Make Greenland Great Again? Trump wants to buy Arctic territory

Make Greenland Great Again? Trump wants to buy Arctic territory

Make Greenland Great Again? Trump wants to buy Arctic territory
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Joan Collins and 110 East 57th Street #8EFG (Getty, BHS)

Soap star Joan Collins lists longtime Midtown pied-à-terre

Soap star Joan Collins lists longtime Midtown pied-à-terre
Tommy Hilfiger and his recently sold estate in Greenwich, CT. (Getty, Janet Milligan)

Tommy Hilfiger’s Greenwich estate sells for $45M

Tommy Hilfiger’s Greenwich estate sells for $45M
Jenna Ryan was part of a group who flew on a private plane from Denton, TX, to Washington, D.C., with the intention of joining the protestors (Twitter.com/DotJenna)

Texas Realtor faces criminal charges for role in Capitol attack

Texas Realtor faces criminal charges for role in Capitol attack
Kirk Goodrich, president of Monadnock Development, is opposed to the bill sponsored by Bran Lander. (Getty, Monadnock Development)

Council bill favoring nonprofits for affordable housing will hurt minority-led firms: developers

Council bill favoring nonprofits for affordable housing will hurt minority-led firms: developers
Cindat Capital Management CEO Greg Peng and Hersha Hospitality Trust CEO Jay Shah with 51 Nassau Street (Google Maps)

7 Manhattan hotels head to auction block

7 Manhattan hotels head to auction block
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...