Major changes to the tax plan have been proposed by President Trump and his administration. The housing market is not greeting these changes warmly.
One of the major changes would double the standard deduction. This could invalidate the tax benefits of home ownership.
To millions of homeowners across the country their house represents their ambitions and their savings. There are currently tax incentives which help people get to become homeowners. Mortgage interest deduction and state and local tax deductions make owning a home more affordable for many. But these tax incentives could be at risk in the new plan being released.
These changes could be devastating to people owning their own homes. These changes could affect the home value and could cause these home values to drop. This could also cause the owner’s equity to decrease or possibly disappear.
Additionally, prospective new home owners could see the dream of owning their own home see their timeline get pushed further away from where they can manage to purchase. By doubling the standard deduction many people would no longer be able to take the tax deductions from the mortgage and real estate taxes.