GOP Tax Plan Impact on Southern California Housing Market

By MSM Luxury Estates

December 26, 2017

GOP tax plan has Americans concerned about becoming homeowners.

According to Bloomberg, Realtor.com has recently conducted a survey on the new tax bill, where more than a half of 2,300 participants said they were worried or even extremely concerned about buying a home now when the new tax bill has passed.

One of the main items of the recently passed tax overhaul are:

• Limited interest deductions in new mortgage debt down to the first $750,000 from the current $1 million cap (however mortgage deductions would still be capped at the old limit of $1 million for home loans issues before Dec 15^th, 2017.)
• Capped deductions at $10,000 for property taxes and some other form of state or local taxes (sales or income)
• The interest paid on loans for vacation homes is no longer deductible.

According to the analysis conducted by Irvine-based Attom Data Solutions, the property tax deduction will now be lower for almost 270,000 Southern California homeowners – this is one out of every 15, if the U.S. Moreover, the mortgage interest deduction also will be lowered for around 14,300 home buyers, or one out of every 9 purchasers. How did it affect Los Angeles and neighbor counties? Below are Analysis results:

• Orange County: 17.3 percent of homes sold this year so far (4,450) had mortgages greater than $750,000; 9.6 percent of property owners (78,011) pay more than $10,000 a year in property taxes.

• Los Angeles County: 15.5 percent of homes sold (9,197) had mortgages greater than $750,000; 9.2 percent of property owners (165,078) paid more than $10,000 a year in property taxes.

• Riverside County: 1.7 percent of homes sold (458) had mortgages greater than $750,000; 2.3 percent of property owners (18,094) paid more than $10,000 a year in property taxes.

• San Bernardino County: 0.9 percent of homes sold (190) had mortgages greater than $750,000; 1.1 percent of property owners (6,345) paid more than $10,000 a year in property taxes.