There's rumblings that tax code will be changed, maybe in a major way. Maybe things will happen to the mortgage interest deduction (MID), or the capital gains exemptions for selling a home. We all know there's plenty of opportunity to make changes. After all, for those with "regular" jobs, who loves getting a year end bonus and watching Uncle Sam and state and local governments take almost the same amount you get to keep?
And part of the debate is what happens to home ownership if the mortgage interest deduction was eliminated? Perhaps nothing, perhaps something depending on who is providing the predictions. If the standard deduction is changed, depending on typical costs of homes, perhaps the homeowner comes out ahead. If in a high cost area, perhaps maybe they don't do as well.
Locally, I wouldn't anticipate any major changes in homeownership or home values with or without major changes to tax law.
Why not?
Because the things that drive people to buy a home for the most part aren't tax driven. Sure it doesn't hurt to get every dollar of tax break we can, but homeownership is not now, nor has it been for everyone nor driven solely by tax consequences.
We routinely help people buy homes, and while they may mention taxes (in particular property taxes), we've never had someone mention a major reason for their home purchase was for the tax break.
No, instead we see people buy homes because:
- they want a home that is THEIRS and that emotion of being able to put down roots and knowing the money they spend for housing isn't to create the landlord's profit.
- they want to paint the walls the colors they want, gut the bathroom and the kitchen to update it, finish the basement, basically do whatever they want. It's MINE!!!!
- they want some certainty. Home ownership gives them that. There's no "I'm raising the rent 20% on January 1" or "I'm tired of being a landlord and I'm selling the place" or "You know, when the lease is up I need a place for my son so you're going to need a new place to live".
For the most part, no matter what happens in DC, I expect locally the primary drivers of homeownership to continue with minimal change. I can see people adjusting their budgets up or down to compensate for changes in tax rates, but they already do that based on home prices changing up or down with existing demand. What I don't expect? To see people give up their hope of homeownership because of changes to tax law. The main reasons to want to own a home aren't changing, so people are still going to buy their new homes because next month they want to paint the walls without someone else's permission.
Need help buying or selling a home in Mason? That's what we're here to do. We regularly work with people on both new construction and resale homes, so just give us a call at 513-520-5305 or email Liz@LizSpear.com.
Serving Mason area home buyers and sellers,
Liz and Bill aka BLiz
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