KIM COOPER: Home affordability threatened

Print Article

Last week the National Association of Realtors sounded the alarm calling on all its members to write their Congress members to block the latest version of the Tax Reform Bill. Both the House and Senate bills would require sellers to have lived in their residence for a longer period of time before qualifying for the capital gains tax exclusion on the sale of a primary home. They would have to live in their house at least five years out of the last eight. Right now, the requirement is two years out of the last five.

Regular readers of this column will recall that with more than a million members, NAR is among the largest lobbies in the nation. We regularly contribute to the campaigns of Republicans and Democrats alike, ignoring political party and focusing on champions of homeownership and private property rights. We don’t know how many of our members responded to NAR’s call to action, but just before this column’s deadline the bill was changed to include a deduction for property taxes, something the earlier draft bill would have eliminated. Said the New York Times late Friday, “Senator Susan Collins of Maine said she has secured the changes she needs to vote yes. For example, the bill will now include a $10,000 deduction for state and local property taxes.”

Also of concern to NAR is the proposed changes to how capital gains are taxed. Under current tax framework, a typical owner, who has lived in his house for at least two years out of the last five years, will pay nothing in capital gain taxes if he sells his house. Under the proposed tax changes, owners need to live in their house for at least five out of the last eight years in order to claim the exemption. Otherwise, they need to pay $3,480 in capital gain taxes. In 2016, 16.5 percent of owners in Idaho had lived in their homes for 2-4 years. These owners will no longer be able to take the exemption based on the proposed tax revisions.

With an average North Idaho home price of $238,972 it may not cause much angst, but changes to the Mortgage Interest Deduction seem to have survived debate. The version of the act passed by the House reduces the amount of mortgage interest that can be deducted from your taxes from the first $1.1 million of your loan to the first $500,000. It also would put an end to allowing a mortgage interest deduction on a second home, which the current law permits.

Advocates for these changes say it will encourage more people to use the standard deduction, which the new plan aims to increase, and thus simplify things at tax time. Home builders and NAR say these changes will discourage homeownership, which in turn could have a negative financial impact for many.

“Our major concern is less incentive to buy a home, which could mean lower homeownership rates in America,” says Lawrence Yun, economist for the National Association of Realtors. “Given that home values have always provided an opportunity to build wealth, we may see greater wealth inequality in the future.”

Although at press time we still don’t know what final changes will be in the bill, it looks like we will be looking at a new way of taxation for next year. If you have been in your home for less than five years, you might want to sell it before the new law takes effect.

Trust an expert…call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

• • •

Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling 208-667-0664.

Print Article

Read More Real Estate News

KIM COOPER: Home sales didn’t freeze

December 10, 2017 at 5:00 am | Coeur d'Alene Press Home loan interest rates increased slightly last week ticking up .04 percent on average. Experts predict another hike after the Fed’s December meeting next week where they are expected to raise the r...

Comments

Read More

NEIGHBORHOOD OF THE WEEK: Luxurious Sandpoint living at new Sandcreek Lofts

December 10, 2017 at 5:00 am | Coeur d'Alene Press Sandpoint continues to attract a healthy spectrum of tourists, retirees and those just looking for a beautiful place to live. Lake Pend Oreille serves as both a pristine backdrop and a source of boun...

Comments

Read More

KIM COOPER: Home affordability threatened

December 03, 2017 at 5:00 am | Coeur d'Alene Press Last week the National Association of Realtors sounded the alarm calling on all its members to write their Congress members to block the latest version of the Tax Reform Bill. Both the House and Sena...

Comments

Read More

NEIGHBORHOOD OF THE WEEK: Coeur d’Alene at 1-2-3 (and 4)

December 03, 2017 at 5:00 am | Coeur d'Alene Press Not everyone wants to be downtown Coeur d’Alene, but enough sure do to keep the real estate active throughout the year. For this week’s Neighborhood of the Week, we’re keeping it as easy as 1, 2, 3…...

Comments

Read More

Contact Us

(208) 664-8176
215 N. Second St
Coeur d'Alene, Idaho 83814

©2017 The Coeur d'Alene Press Terms of Use Privacy Policy
X
X