The Republican party’s self-imposed Christmas deadline for the widely debated tax bill is fast approaching. Last week, Republican lawmakers announced they had the votes necessary to pass the converged Tax Cuts and Jobs Act bill. As the process moves forward, details are changing quickly, and, now, a couple of steadfast voters may not cast their ballots.
The lineup of confirmed voters has changed since the voting of the Senate tax bill. Sen. John McCain (R-Ariz.), who was a key supporter, will be absent during tomorrow’s vote as he continues his fight with cancer. He flew back to Arizona after being recently hospitalized in the Washington area for chemo-related side effects. Sen. Thad Chochran (R-Miss.) is also reportedly ill, but is expected to vote. Republicans gained a last-minute turnaround with Sen. Bob Corker (R-Tenn.), who initially voted against the Senate bill, but has now flipped to yes.
The absence of Sen. McCain and Sen. Chochran, however, does not point to an upcoming loss, as the Republican party won over key holdouts on Friday. Sen. Susan Collins (R-Maine), who was previously on the fence, has confirmed her support. In addition, Sen. Mike Lee (R-Utah) and Sen. Jeff Flake (R-Ariz.) have not declared their votes (at press time), but shared their approval over the child tax credit and a gradual phase-out of the five-year expensing provision, both of which made it into the final version of the bill.
Full details of the bill emerged on Dec. 15. The final bill features two major tax policies that will impact real estate:
- Mortgage Interest Rate Deduction Capped at $750,000
This will not affect current homeowners, but those who purchase once the bill has been passed. Those who purchase in costly cities may not benefit from the lowered limit. It may also keep homeowners from listing and trading up to a more expensive home if they will not reap the rewards of the tax deduction.
- $10,000 Limit on Property Tax Deduction
Homeowners in high-tax states may see a tax increase, as they will no longer be able to fully deduct state and local property taxes, in addition to income or sales tax.
Some of the provisions also come with expiration dates, according to the Wall Street Journal. Individual tax cuts and a 20 percent business deduction expire in 2025. Additionally, the $2,000 child tax credit and $10,000 limit on the state and local deduction may lose value over time due to inflation, the WSJ reports.
Key influencers in the real estate industry continue to speak out against the bill. The National Association of REALTORS® (NAR) released a statement last week saying they will continue to fight for homeowners.
“Homeownership is an aspirational goal for millions of Americans, but getting there isn’t always easy,” said NAR President Elizabeth Mendenhall. “Middle-class families count on tax incentives like the mortgage interest deduction and the state and local tax deduction to make homeownership a more affordable prospect. REALTORS® will continue to advocate for these and other important provisions as the tax reform debate continues.”
Meanwhile, …read more
From:: Real Estate News