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GOP Tax Overhaul: How Virginia Homeowners Will Be Affected

The people of Virginia and this nation need leaders who will fight to ... All of this could have a negative effect on real estate markets across the country, which are still recovering from the 2008 housing market crash. According to Moody's, the bill ...

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WASHINGTON, DC — The Republican tax bill has been approved by both houses of Congress, which means that Virginians are going to find out who are the real winners and losers of the lawAnd according to a new study by real estate company Zillow, many potential homeowners are going to lose out due to a lowered cap on the mortgage interest deduction.The people who are going to be hurt the most are those who depend on the State and Local Tax deduction (SALT), which is being reduced to $10,000Current mortgages are not affected by the tax plan, but home buyers in many Virginia counties will be affected by the plan, which Trump lauded in a televised ceremony Wednesday afternoon.But there will be some in the Commonwealth who will see a tax decrease, at least for the next few yearsThe child deductible is doubling to $2,000, and the Standard Deduction is also doubling to $12,000 for singles and $24,000 for couplesIf you want to see how the tax bill will affect you, try using this calculator from Market WatchFor the future, changing the MID could have a chilling effect on northern Virginia's housing economyThe MID allows homeowners to deduct the interest paid on their mortgages from their taxable income, which decreases their overall tax bill, instead of using the Standard DeductionUnder the current law, the MID is capped at $1 millionBut under the GOP tax bill, that would drop to $750,000The reduction would only apply to new mortgages, not existing ones.The percent of homes under the bill where the mortgage interest in the first year of the loan would be high enough for a homeowner to take the MID instead of opting for the standard deduction (assuming also taking advantage of SALT deductions) changes drastically from previous law in several Virginia counties and cities:Fairfax, 96.23% currently to 63.79%Fauquier, 92.53% currently to 24.92%Loudon, 97.40% currently to 55.84%Prince William, currently 96.14% to 28.76%Spotsylvania, currently 71.57% to 5.52%Stafford, currently 90.90% to 10.97%City of Alexandria, currently 89.71% to 17.65%Arlington, currently 96.91% to 69.52%Richmond, currently 37.52% to 8.90%Norfolk, currently 22.00% to 3.20%After the Senate passed the bill, GovTerry McAuliffe released a statement blasting the measure, saying the GOP cares more about enriching donors and corporations than serving families facing economic challenges."At a time when corporations are posting record profits and workers continue to get squeezed, this bill tips the scale even further toward the wealthy and away from the middle classThe people of Virginia and this nation need leaders who will fight to create opportunity for all people, not just the wealthy and well-connectedThe members of Congress who voted for this disastrous bill let us down," McAuliffe said.All of this could have a negative effect on real estate markets across the country, which are still recovering from the 2008 housing market crashAccording to Moody's, the bill could reduce national home prices by as much as 5 percent."The Northeast Corridor, South Florida, big midwestern cities, and the West Coast will suffer the biggest price declines," Moody's writes"Counties such as Westchester, NY, Cook IL and Delaware PA will experience double-digit price declines."According to an analysis by Zillow, under current law roughly 44 percent of U.Shomes are worth enough for it to make sense for a homeowner to itemize their deductions and take advantage of the mortgage interest deductionUnder the new bill, the percentage of homes drops to 14.4 percent.Zillow's analysis says that more homeowners are likely to choose to take the standard deduction, which is doubled under the proposed GOP bill.States like New York, California, Hawaii, Massachusetts and the District of Columbia have the highest percentages of homes purchased with loans above $750,000 in 2017, according to ATTOM Data Solutions.Counties with the highest shares of homes with property taxes above $10,000 are Westchester County, New York, Luna County, New Mexico, Rockland County, New York, Mathews County, Virginia and New York County (Manhattan)Counties with the highest volume of homes with property taxes above $10,000 were Nassau County, Long Island, Los Angeles County, California, Suffolk County, Long Island, Bergen County, New Jersey and Harris County, Texas, according to ATTOM Data.Zillow estimates that in Washington D.Cfor example, the percentage of homes valued high enough for an owner to get a better deal by taking the mortgage interest deduction — assuming they also take advantage of the SALT deduction — goes down from 98 to 64 percent.Zillow's analysis is based on the estimate that homeowners are in their first year of paying back their loan — when interest payments are largest — and they have a 30-year, fixed-rate mortgage at a 4 percent interest rateCounty property tax numbers were based on 2016 numbers from the National Association of Home Builders.An analysis from The Tax Foundation in August says that reducing the cap would increase taxes primarily for high-income taxpayers.See the full report from Zillow hereImage via ShutterstockBy Feroze Dhanoa, Patch National StaffDeb Belt, Patch National Staff, contributed 6441 Richmond Hwy Apt 302Alexandria, Virginia 22306 For Sale: $139,9001 bd/1 full ba, 691 sqft More Info 3315 Wyndham Cir Apt 1222Alexandria, Virginia 22302 For Sale: $295,0002 bd/2 full ba, 1,096 sqft More Info 4910 Waple LnAlexandria, Virginia 22304 For Sale: $785,0003 bd/3 full ba, 3,122 sqft More Info 560Sw St N Unit N8903Washington, District of Columbia 20024 For Sale: $414,9001 bd/1 full ba, 980 sqft More Info 4600 S Four Mile Run Dr Apt 540Arlington, Virginia 22204 For Sale: $179,9001 bd/1 full ba, 881 sqft More Info 1215 Morris Rd SEWashington, District of Columbia 20020 For Sale: $280,0003 bd/1 full ba More Info 7938 Sausalito Pl Unit BAlexandria, Virginia 22309 For Sale: $212,9003 bd/2 full ba, 1,300 sqft More Info 5519 Eyler DrAlexandria, Virginia 22315 For Sale: $579,9003 bd/3 full ba, 1,920 sqft More Info 6300 Stevenson Ave Apt 710Alexandria, Virginia 22304 For Sale: $199,9002 bd/2 full ba, 1,061 sqft More Info 6300 Stevenson Ave Apt 106Alexandria, Virginia 22304 For Sale: $172,5001 bd/1 full ba, 749 sqft More Info Read More Subscribe More from Old Town Alexandria PatchUp next on Old Town Alexandria Patch Cost To Gas Up In Alexandria Before Christmas 2017 Travel 1,405?? 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