Homebuyers and homeowners are anticipating fallout from the Tax Cuts and Jobs Act, which has changed homeownership incentives, including the deductions for mortgage interest and state and local taxes.
How deep the effect is hinges on location, according to new research.
With the bill’s new provisions, the mortgage interest deduction (MID) is applicable to loans of up to $750,000 (down from $1 million), and state and local tax (SALT) deductions are limited to $10,000. An analysis conducted recently by HouseCanary, provider of predictive real estate analytics and insights, determined that 82 percent of lost MIDs under the new laws are concentrated in 10 metropolitan statistical areas (MSAs), including four California MSAs and four East Coast MSAs.
All told, 6.4 percent of loans between $750,000 and $1 million could be affected by the changed MID, or $287 million in deductions lost total, the research reveals.
In the case of the deduction of state and local taxes, including property taxes, 66 of the 3,134 counties in the U.S. could be impacted, the research shows. Bearing the brunt could be Boston, Mass., New Jersey and New York, where citizens could depart for lower property taxes in other states.
Thirty-three percent of Americans approve of the Tax Cuts and Jobs Act; 55 percent disapprove, according to a Gallup poll in January. More than 35 percent of respondents to a December realtor.com® survey were “concerned” about homeownership in light of the reform.
For more information, please visit www.housecanary.com.
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