With the new tax laws & Long Island homes

What does everyone think is going to happen to the price of homes on the island when this new tax thing is in full force? So once people start filing 2018 taxes in 2019? Does everyone think there’s going to be a decrease in home values or an abundance of homes for sale?
We are contemplating selling, if we do it won’t be for a bit, but I certainly don’t want to sell and make nothing from the sale...... I did see on the news NY is applying for something, I forget how they phrased it that wouldn’t make thins tax thing as bad for us?

Message edited 1/22/2018 10:28:15 AM.

Re: With the new tax paws & Long Island homes

The new tax laws, as I understand them, will really affect the high end of the market (as there are limits on the mortgage interest that can be deducted, and also property tax deductions are capped at $10K, from my understanding). As far as the mortgage interest deductions, I think it will only affect mortgages over $750K. But maybe an accountant can clarify, as this is just my understanding from the last time we discussed this in a real estate networking group a month or so ago.

So if you live in a north shore estate or on the east end, or plan to buy a home there, you would be affected. For most of the Long Island market, which is in the $450K to $650K range, it won't have an impact.

The effects remain to be seen, but even with the seller's market we have been experiencing, the biggest jump in prices and the highest demand has been for these starter and mid-range homes.

One potential impact of the new tax laws could be that fewer people in these starter/mid-range homes will sell, if they planned to trade up to the high-end market.

However, if someone can afford a million plus home and take out a $750K mortgage, perhaps the interest deduction isn't a huge factor, so perhaps it won't make a huge impact.

But certain areas of LI likely won't be impacted by these new rules at all... it really will affect higher end areas.

Re: With the new tax paws & Long Island homes

I personally thing that the hot areas will still be hot, regardless of taxes. Yes, owners of properties with high property taxes will wind up paying more at the end of the day, but in the nicer/more affluent areas, people generally have enough money to cover those expenses anyway, and will still want to move there.

Some buyers will be deterred from high tax areas, but with the LI market as tight as it is, I don't think you'll lose money on your house unless you haven't maintained it. Property taxes alone won't cause your house to lose value.

And, remember that in 3 years we will (hopefully) get a new president and we have have a tax overhaul again then!

Re: With the new tax laws & Long Island homes

Hot areas will continue to be hot. Don’t see Mass depreciation of house values on Long Island. There is simply too much demand.

Also see houses with low property taxes to carry even more value. My house is way under assessed, compared to what neighbors are paying (even with smaller houses). I expect my property value to go up even more as buyers are going to see lower property taxes and pay a premium.

Re: With the new tax laws & Long Island homes

Re: With the new tax laws & Long Island homes

Posted by NYCGirl80

Posted by Christine Braun - Signature Premier Properties

The new tax laws, as I understand them, will really affect the high end of the market (as there are limits on the mortgage interest that can be deducted, and also property tax deductions are capped at $10K, from my understanding). As far as the mortgage interest deductions, I think it will only affect mortgages over $750K. But maybe an accountant can clarify, as this is just my understanding from the last time we discussed this in a real estate networking group a month or so ago.

Yup, this is mostly correct. Older mortgages are grandfathered in while mortgage interest deductions on newer mortgages are limited by the principal balance of the loan to $750k. So under the new tax code, 100% of the interest can be deducted on any mortgage loan with a principal balance that's less than $750k.

There is a $10k cap, too, but it's on state + local + property taxes combined - so income and property taxes together are going to be capped.

Basically, if you're working and paying taxes, you'll likely come close to that $10k cap on just your income taxes alone, and therefore, you will not be able to write off much of your property taxes (whereas you used to be able to write it all off). This is why there was a rush to pay local taxes at the end of 2017.

Now that I've said that, Christine...I'm just trying to block this out of my head for now