HEADS-UP! 10.2% is the amount home prices would fall in the short run as a result of the comprehensive tax reform proposal currently being discussed in the Nation’s Capital. This finding is part of a study commissioned by the National Association of REALTORS® to look at a comprehensive tax reform option that would lower and consolidate marginal tax rates to three rates with a top rate of 33 percent, double the standard deduction, eliminate all itemized deductions other than charitable contributions and mortgage interest, eliminate the Alternative Minimum Tax, and cap the tax rate on pass-through business income at 25 percent.
Homeowners with an adjusted gross income (AGI) between $50,000 and $200,000 would see an average annual tax increase of $815. Non-homeowners with AGI in the same range would see an average annual tax reduction of $516.
Home prices nationwide in the short run would fall by 10.2 percent as a result of the comprehensive tax reform option.
The combined tax savings for those who claim the mortgage interest deduction (MID) and real estate tax deduction would fall from over $1.3 trillion for fiscal years 2018-2027 under the current law to just $232 billion under the comprehensive tax reform option, a drop of 82 percent.
An estimated 83 percent of all personal income taxes are paid by homeowners.
Non-homeowners, across all income categories, would see tax decreases on average.