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Republican tax plan will drop Pennsylvania property values, critics argue
But numbers from the Pennsylvania Association of Realtors show a potentially ... will be the correct way to go," McQuilkin said. The real-estate business is already seeing some of the lowest home ownership rates on record as younger people delay buying ...
By Steve Marroni
While supporters of the proposed tax plan passed in both the House and Senate say it will save the average taxpayer money while boosting the economy, critics argue it will decrease property values around the country -- including those in the Harrisburg area
Critics worry about the ripple effect the tax plan will have on housing, primarily due to proposed limitations on deductions for mortgage interest and state and local taxes, Philly.com is reportingThose changes, critics argue, could also squeeze local governments that rely on local taxes to fund schools and services.
A Philly.com study of statistics from Moody's Analytics shows the eight counties in our region would all see a decline in property values in 2019.
Those statistics show:
Dauphin County down 3.1 percent
Cumberland County down 2.5 percent
Franklin County down 1.8 percent
Lebanon County down 2 percent
Lancaster County down 2.5 percent
Northampton County down 1.3 percent
Perry County down 1.9 percent
Schuylkill County down 1.9 percent
And York County down 3.9 percent
But numbers from the Pennsylvania Association of Realtors show a potentially bigger drop off - an average of 10 to 15 percent across the stateAnd this is coming at a time when the market has just recovered from the 2008 downturn, association president Kathy McQuilkin told PennLive.
"This would be a big negative for our homeowners," she said"We would be placed in a situation we're just getting out of."
Jamie Ridge, president of the Suburban Realtors Alliance, which represents Realtors from Montgomery, Chester, Bucks, and Delaware Counties, told Philly.com his members "are extremely concerned."
"Most of the time when you're trying to determine what a family can afford, the mortgage interest deduction and state and local property taxes and state and local income taxes all play into that," Ridge said.
Both the House and Senate plans raise the standard deduction, meaning fewer people would itemize.
And with 61 percent of Pennsylvania's 3.4 million homeowners having a mortgage, that's a huge concern, McQuilkin said.
Beyond that, home ownership has been incentivized for generations through the current tax framework, McQuilkin said, and the plan could hurt the stabilizing effect home ownership has on communities, as well as the long-term savings in represents for homeowners.
Another concern, she said, is the capital-gains exemption for those living in a home two of the last five years will change to five of the last eight, which would negatively impact home ownership for not just the region's military families, but for corporate relocation, as well.
"We don't believe taking away from homeowners, who are the backbone of our communities, will be the correct way to go," McQuilkin said.
The real-estate business is already seeing some of the lowest home ownership rates on record as younger people delay buying a home due to the burden of student-loan debit, she said.
But supporters say the bill will pay for itself through greater economic growthU.SRepLou Barletta, a Republican whose district includes parts of Dauphin and Cumberland counties, argues the plan will allow taxpayers to save more of the money they earn to put into their homes.
"By allowing Americans to keep and save the dollars they worked two and even three jobs to make, our plan will incentivize savings for Pennsylvanians to put more money down to purchase a home, or for maintenance on a home they already own," Barletta said in a statement released to PennLive.
He added wages will rise and the job market will grow.
Barletta said that if the plan is passed, "Pennsylvanians may finally recognize that uncompetitive, high state and local taxes are to blame for home valuations, not federal tax cuts."
And RepRyan Costello, a Republican from Chester County, told Philly.com the overall economic climate is what weighs more heavily on whether or not people buy homes.
"If we have a tax code that is creating a competitive job market with wage growth, and you have companies wanting to be here..folks are going to want to live here, that's going to drive house price, that's going to drive housing demand," he said.
The Senate and House both passed tax overhaul bills.
The final Senate bill differs from the tax bill the House passed in November, and now, those differences must be reconciled and a final piece of legislation voted on by both chambers before getting it to President Donald Trump's desk.
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