Two of the real estate industry’s biggest lobbying organizations have expressed concerns with Congress’ proposed tax reforms.
“Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership,” said National Association of Realtors president Elizabeth Mendenhnall, according to Mortgage Professional America.
Mendenhall said NAR has concerns over how the proposal could impact middle-class homeownership.
“We’ve already seen that a near-doubling of the standard deduction, combined with the elimination of other deductions like the state-and-local tax deduction, can turn the American Dream into a nightmare for families, as the rug is pulled out from under them,” she added.
Limiting the mortgage interest deduction could cause home prices to fall by more than 10 percent in suburban counties close to New York, far greater than the 3 to 5 percent decline nationwide, according to Moody’s Analytics.
But the plan would also lower the top tax rate on pass-through entities like LLCs, which could mean big savings for condo developers, as The Real Deal reported.
The National Home Builders Association said it does not support the House of Representatives’ bill, but that there was some good news from the Senate version.
“However, though the Senate bill provides meaningful tax relief for small businesses and keeps the complete Low-Income Housing Tax Credit program in place, we still believe that maintaining an effective homeownership tax benefit is vitally important,” NHBA chairman Granger MacDonald said. [MPA] – Rich Bockmann