In a post published on the National Association of Realtors (NAR) Economists’ Outlook blog, Nadia Evangelou, an economist for NAR, estimated how tax reform would affect different locations across the country should a final, reconciled bill pass both chambers of Congress, based on which locales are most heavily relying on the homeowner and real estate tax breaks addressed by the bills.

After House Republicans passed a bill in mid-November to overhaul the current tax code, the Senate followed with its own proposed legislation, which earlier this month was voted through after a flurry of last-minute amendments. Real estate professionals and industry associations have expressed concerns over how such reform, including changes to the mortgage interest tax break, real estate tax deduction and capital gains taxes, could hurt home values and the incentives to own a home.

In a post published on the National Association of Realtors (NAR) Economists’ Outlook blog, Nadia Evangelou, an economist for NAR, estimated how tax reform would affect different locations across the country should a final, reconciled bill pass both chambers of Congress, based on which locales are most heavily relying on the homeowner and real estate tax breaks addressed by the bills.

According to Evangelou’s analysis, Loudoun County, Virginia, relies most heavily on the mortgage interest deduction (MID) tax break of any county in the U.S., with 46.5 percent of taxpayers in that area claiming the MID in 2016, slicing an average of $13,460 from their taxable income. Loudoun would be most impacted by the House bill’s proposal to cap MID eligibility at $500,000 mortgages, down from $1.1 million. According to Zillow, the median home price in Loudoun County is $472,900.

Following Loudoun are Douglas County, Colorado; and Forsyth County, Georgia; where 46.1 percent and 44.3 percent of residents use the MID, respectively. Taxpayers in Douglas County deducted an average of $11,050, while taxpayers in Forsyth County deducted an average of $9,360.

NAR’s Evangelou also noted that the counties of San Mateo; San Francisco; and Marin in California would be disproportionately impacted by the MID cap since 91.7 percent to 94.3 percent of homes in those counties are worth over $500,000.

Although the MID cap would only apply to new mortgages, NAR predicts that its implementation would discourage current owners from moving into newer, more expensive homes.

When it comes to the real estate tax deduction, preserved by both bills only up to $10,000, Hunterdon County, New Jersey, would be most affected with 52.5 percent of homeowners in the area using the deduction to shave off an average of $10,170 from their taxable income.

Douglas County and Loudoun County would experience a double-whammy if the current version of the tax reform bill is passed. Roughly 49 percent of taxpayers in both counties used the real estate tax deduction to subtract an average of $3,340-$5,770 from their taxable income.

Additionally, under both the House and Senate versions of the bill, homeowners pay for capital gains taxes until they live in their homes at least five out of the last eight years.

If this part of the bill remains in the reconciled version, the Colorado counties of Garfield, Moffat, Rio Blanco and Routt would be most impacted since more than 20 percent of owners have lived in their home for only two to four years.

For the full analysis and to see how your county fares, click here..

Email Marian McPherson.

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