Tax Reform Will Hurt California Housing Markets

Although the final bill has yet to be approved, the proposed Tax Reform bill looks to have severely detrimental effects on the California housing markets:

  • Deduction of state and local taxes to be capped at $10,000 (including property taxes)> Currently, Californians average deductions of $16,000.
  • Mortgage-interest deduction to be capped at $750,000. Currently the cap is at $1 million.
  • New buyers would love approximately $25,000 in the first year of buying a home priced at $1.2 million. The bill hurts new homebuyers more severely than existing homeowners.

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