This is an example of a powerful and attention grabbing headline but, in reality, how much of what we hear and read is merely hype and hyperbole potentially devoid of fact?
The truth is that we will not know the impact, if any, that Donald Trump will have on real estate and the economy until he’s in office and starts to actually govern.
We do know, however, that sensational headlines by the media and forecasters from both sides of the political spectrum have been running rampant since November.
We also know that many of these so-called ‘experts’ have been wrong about most everything concerning the 2016 presidential election and its aftermath for the economy and financial markets. So, will they be correct now?
Of course in America, the beauty of political and economic prognostication is that anyone can do it, and it’s then up to the reader/listener to ferret-out for themselves what they think may or may not be relevant or factual.
That said, the following is an article in the Long Island Newsday Business section…
‘Trump tax proposals could affect Long Island housing market‘ by Maura McDermott
President-elect Donald Trump wants to raise the standard deduction, which would blunt the benefits of deducting home mortgage interest and real estate taxes, and could prompt more Long Islanders to seek out rentals, local real estate professionals and business leaders say.
The incoming administration wants to raise the standard income tax deduction for married couples to $30,000 from the current $12,600, according to Trump’s campaign website. Single filers could deduct $15,000, up from $6,300.
The Republican-led Congress has indicated it is eager to pass sweeping tax changes that also would increase standard deductions.
Households filing their tax returns can choose either to take the standard deduction or to itemize deductible expenses. Sharply raising the standard deduction would mean that for some taxpayers it would no longer make sense to itemize deductions such as mortgage interest, which is now deductible for up to $1 million in debt.
The fact that homeowners can deduct mortgage interest and property taxes encourages Americans to buy homes, said Stephen Breitstone, vice chairman of the law firm Meltzer, Lippe, Goldstein & Breitstone LLP in Mineola. A typical Long Island family earning about $100,000 and carrying a $300,000 mortgage will likely pay between $20,000 and $30,000 a year in mortgage interest and property taxes, so homeownership lets them deduct more on their federal return and pay less in federal taxes, he said.
For many taxpayers under Trump’s plan, “you don’t get that additional deduction anymore, so whether you rent or you buy, your taxes are essentially the same,” he said.
The result, Breitstone said, is that “there would be less demand for homes and probably more demand for rentals.”
Read the rest of the article at Newsday here.