Partner Andy Starrels shares his thoughts on the new tax plans that have passed in the House and Senate and how they could impact housing demand and construction.
"First, it’s important to remember that for many taxpayers, the mortgage interest deduction for federal income tax purposes has been a vitally important tax planning strategy for generations, and has been a determinative factor in individual decisions to purchase a home," Mr. Starrels said.
"This is especially important in California, where property values are higher than in other parts of the country, and homeowners have significant amounts of their personal wealth committed to their residences. Both the bills approved by the House and the Senate will reduce the amount of deductibility for mortgage interest, and to the extent that the new tax scheme removes incentives for home ownership, it will affect housing affordability and potentially drag down home construction."
READ: New Tax Plan Hits Housing Construction (Subscription required)
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