Some real estate experts believe that the brand-new tax laws will have a negative impact on the real estate market throughout the United States. This perceived negative impact includes dropping home prices, more rentals and residents' leaving high-cost states, such as New York. However, other real estate experts say that these assertions are overblown because the residential real estate transactions of most Americans will not be affected.
The new tax laws enable taxpayers to take advantage of mortgage interest deductions on home loans no higher than $750,000. This figure used to be $1 million. However, since the median home price in the United States is only $270,000, the majority of new residential real estate owners will not be affected.
Existing owners of homes will end up being grandfathered into the former deduction limit. Thus, the drop from $1 million to $750,000 will likely affect only around 1.3 percent of future mortgages. These mortgages will most likely be the ones made to wealthy homeowners as well as to those in pricier regions of the United States.
As most homeowners will not be affected by the tax reforms, potential homebuyers may breathe a sigh of relief, knowing that they can move forward comfortably with new real estate transactions. However, the inherently complex process of buying a home is stressful and even intimidating. An attorney in New York can help to ensure a smooth process from a legal standpoint, making sure that one's rights are safeguarded from the time an offer is made to the closing of the deal.
Source: realtor.com, "Does the New Tax Plan Really Threaten the American Dream?", Clare Trapasso, Dec. 19, 2017