What the proposed tax plan means for housing in King County
Last week, the House GOP released their promised tax proposal, the Tax Cuts and Jobs Act. Here are three key changes put forth in the plan:
- Reducing the limit of deductible mortgage interest from $1 million to $500,000 for new loans taken out after November 2, 2017;
- Capping the amount for state and local property tax deductions at $10,000;
- Raising the standard deduction from $6,350 for individuals and $12,700 for married couples to $12,200 and $24,400, respectively.
The impact of this tax proposal on individuals and families will vary—much depends on where you live and how much your home is worth. In Seattle, with the median home price at $725,000 (and even higher on the Eastside), King County area homeowners stand to lose thousands of dollars to taxes per year under this proposal. Well over 50% of all buyers in King County would have their future mortgage deductions capped.
Additional impacts include an increase in the overall cost of buying a home and fewer existing homeowners looking to sell, both of which would raise costs and decrease inventory in our already stretched market.
Seattle King County REALTORS® supports lower taxes, but not at the expense of our current and future homeowners. SKCR urges all REALTORS® to let Congress know you oppose the elimination of tax incentives for homeownership.