The new budget proposal has a lot of interesting items included in this Trojan horse budget proposal. The administration is proposing trimming the amount of interest that could be written off depending on income. While at first it sounds fair the reality is that those top income earners that make over $208,850 are at risk for higher taxes and itemized write offs on all fronts. Home owners in those brackets above it is proposed to limit the tax rate at which high-income taxpayers can take itemized deductions to 28 percent. For home owners in high priced markets New York, California, Boston and DC this will be a hardship. For real estate agents this will take the wind out of the sails of many buyers as home buyers become more realistic on how much home and expense they want to carry. This tax would not only limit the amount of mortgage interest that could be deducted, but also state and local property tax and charitable contributions. The amount deducted would be capped for these upper income earners (over $208,850) to 28 cents on the dollar as opposed to the current 35 cents. This will have a severe impact on real estate as we know it.
In more expensive areas where it takes a large income just to qualify for the average home because of the high cost of living... this is a major blow to those struggling to pay their mortgage, pay increasing local property tax, and other expenses. There should be a major outcry from the real estate community on this portion of the budget proposal. Legitimate deductions are being trashed while the pork in DC just grows and grows and grows! How come there are no cuts in the Federal Budget?
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Jim, please tell me this is not so! This country is carried by those people. They are the small business owners, the middle class professionals. Why can't we delve in that upper stratum that earns in the seven digits? Oh, I forgot; those are the ones keeping our politicians in business....
Let's organize now on this horrible item! Let's do it!
Mirela Monte, Your Myrtle Beach Connection I must admit that I did not learn this until this evening. NAR needs to get on the horn, we must get the word out!
Jim, you keep putting your finger on the important issues. Did you get the NAR email about this?
Jeff Geoghan MBA - Lancaster PA Real Estate Expert (The Jeff Geoghan Realty Group, Coldwell Banker Lancaster PA) No I did not, I browse the news lines many times a day and came across a few stories about this.
Jim,
It is just another way the urban, inner sub urban people will be penalized. Why can't they tax future bank profits at a higher rate to make up for all this. The average family in the city areas are pressed already with heavy real estate taxes averaging over 2% of value and state income tax 7% of gross in New Jersey. Along with, 1.2% transfer tax, 1% buyers tax, 2.5% low income housing tax on new homes. Everyone is leaving as soon as they can. Who is going to pay the taxes to hold up Paterson, Newark, Jersey City, Elizabeth, Camden and the like. It comes from the higher end areas.
The federal government now, doesn't care how we hold it together, they are putting another nail in the coffin of Real Estate, they say they want to help. I don' t get it!
Richard Stabile Bergen County New Homes Builder Realtor (REMAX real estate associates) The Federal Government has lost touch with reality! With all the foreclosures, the decline in home prices, the government is giving one more excuse not to buy a home! Does this make any sense what so ever? They keep saying the economies problems were caused by housing, and yet they are pushing us off a cliff!
Either our government leaders are inept or they do not care. The whole class envy thing seems to work for them but it is going to destroy the economy of this country even more.
Kevin Robinson ~I buy short sales (Crownline Home Builders) I think it is out and out agenda of socialism. However they keep and spend our money. The politicians do not give up their lifestyle! How did you like that about Tom Daschle? As a senator he rode around in a car with a chauffeur paid by a special interest? No one in Congress in his party saw anything wrong with this? It makes you wonder what their secrets are! Hello? Excuse me, his special interest is supposed to be American citizens not himself! How sickening, and how self serving!
I guess there was going to be a catch somewhere down the road. The only other option was to just keep printing money!!!!!
Jim,
You're right on with this. The Fed has lost touch. Hopefully this provision will be eliminated from the final budget. Time will tell.
Ellie McIntire Real Estate in Howard County Maryland (The McIntire Team of Long & Foster) That is already happening. Persons do not realize that the credit they will receive $8-12 a week extra in their pay (if they still have a job) is owed back next year and will count as income! How is this helping the poor?
Ben Olson Minnesota Mortgage Specialist (Mortgages Unlimited) It is time to get on the horn to our elected officials and read them the riot act! It is bull!Congress caused this entire thing! Lack of Federal oversight on the banks, the stock markets, no enforced Federal Regulations, the SEC was not doing their job, the dismantling of the Glass-Steagall Act, Fannie Mae and Freddie Mac ability to lobby Congress, Representatives and Senators receiving monies from lobbyists etc...
Congress was too busy looting the til to give a damn about this nation, and now we are expected to bail this out! Nonsense!
"The problem with socialism is that you eventually run out of other people's money." Margaret Thatcher
The problem with socialism is that you eventually run out of other people's money." Margaret Thatcher
Jim, I love that!
Having first hand experience of "Socialism", as it was called in Communist Romania, I have a deep seated fear of government interference. We are at a cross roads and it took a long time to get here. We have good reason to stay alert...
I remember Romanians saying: "We act like we are working and they act like they are paying us." Romanians have always found a way to cope with the subjugation and they typically resorted to humor. I hope we are more resourceful than that...
Mirela Monte, Your Myrtle Beach Connection Vladimir Putin warned President Obama last week not to make the same mistake that the Soviet Union did experimenting with socialism! He said it was a total failure. Unfortunately that seems where we are headed, and there is no way to change the minds in Congress.
Jim, this is one that many of tried. Keep in mind it is merely a proposal, and it not likely to make it through both houses of Congress.
Patricia Kennedy (Evers & Company) This time both houses of congress are the same party and it could be just rubber stamped! That is the fear. We'll soon find out if thye rail road this as quickly as they did the bailouts.