Could new tax changes make renting more appealing to Long Islanders?
Taxes could change a lot in 2017. It could be great for some, not so much for others. Everyone may have to deal with some confusion and ups and downs as new tax rates and rules take shape.
New Yorkers already know that their property taxes are almost invariably going to go up every year. We recently covered a new tax change that could rocket the average federal income tax bill by around 30% this year, in this post. There is hope that overall taxes may come down, or breaks will be preserved for many individuals and especially real estate investors. However, some local business leases and property professionals have also expressed concern that a proposed raise in the standard deduction by Trump could mute the benefits of owning versus renting real estate.
Tax breaks have long been one of the perks of buying homes promoted by real estate agents and mortgage banks. Taking that away may definitely soften some of the urgency to buy, or to buy and borrow so big. This could be compounded this year by a string of expected interest rate hikes, and soaring property prices.
This is unlikely to hurt the property market. There is so much demand, and so little inventory that any small pull back could actually provide some easing for buyers and investors. The downside might be for individuals and families who sell homes and remain long-term renters, and who ultimately miss out on one day owning a home with no payments, rising wealth in equity, and the other non-monetary benefits of home ownership like kids’ school performance.
Of course, the long term benefits of tax changes and home ownership don’t always make things easier in the short term. This makes it even more essential for Long Islanders to seek great tax help over the next few weeks. Get a good accountant to create a strong tax strategy for 2017 based on new rules. Get pro help preparing and filing your taxes. Leverage local Property Tax Adjusters, Ltd. to reduce your property tax bill.