Crazy Sh*t In Real Estate Episode 93: Jamie Gregory

Summary:

Tax reform is on its way…FAST. Jamie Gregory explains what’s going on in Washington D.C. and how it negatively affects homeowners by taxing away tax incentives. Tune in to learn the benefits of homeownership, who is affected (hint: YOU), and what you can do to make your voice heard before it’s too late.

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Time Stamped Show Notes:

00:50 – Jamie is with the National Association of Realtors (NAR) in Washington D.C.
01:45 – What is going in Washington D.C. and the world of lobbying?
01:55 – The passage of the tax bill out of the Ways and Means Committee
02:02 – The release of the senate bill with provisions that affect housing, home ownership, and real estate
02:20 – On the house side, chairman of the committee Kevin Brady says mortgage interest deduction has been retained, when in actuality its effectiveness is nullified
2:38 – Bill will double standard deduction and eliminate state and local tax deduction, meaning only 5% of tax filers will be itemizing
3:00 – Incentive provided by mortgage infrastructure will be taken away
03:13 – Homebuyers receive tax refund, see financial benefit, and put money back into the local economy
03:45 – Renters are great but homeowners tend to invest in and care about the improvement of their neighborhood more
04:20 – Sociologists have studied how home ownership creates more stable, active, voting communities
04:30 – We don’t want to take that away; for 100 years, there has been an incentive in the tax code for homeowners
04:43 – What is being proposed in Washington will take that away and make renting and owning no different
05:08 – Other things in the tax reform: Punishment for buying a home and watching equity values increased over time
05:25 – State and local deductions – house bill retains reduction for state and local property tax, but 70% of deduction is for income tax, which has been removed
05:46 – In senate bill they have eliminated state and local deductions
05:58 – Combined with mortgage interest deduction, the state and local deduction provide total incentive to buy a home
06:08 – In 1997 congress passed the Homeowner’s Capital Gains Exemption: If you sell your house after 2 years you can keep up to $250,000 tax free as a single filer and up to $500,000 if married
05:25 – State and local deductions – house bill retains reduction for state and local property tax, but 70% of deduction is for income tax, which has been removed
05:46 – In senate bill they have eliminated state and local deductions
05:58 – Combined with mortgage interest deduction, the state and local deduction provide total incentive to buy a home
06:08 – In 1997 congress passed the Homeowner’s Capital Gains Exemption: If you sell your house after 2 years you can keep up to $250,000 tax free as a single filer and up to $500,000 if married
06:30 – The house is proposing to change the rules on that to more than double the time requirement
06:50 – The provision was put in place to help people unlock home’s value and functions well for military, people who move frequently
07:25 – The elimination of second homes; mortgage interest deduction won’t be used on second homes
07:34 – This affects not just executives or military; many people move regularly or have other living situations, and changing the rules negatively impacts those people
08:32 – National average for living in a house was 5-6 years, and has crept up to 7-9 with recession
09:44 – When the Homeowner’s Capital Gains Exemption was passed in 1997, it simplified the process from how it was before
10:14 – Resource to understand the whole picture: https://www.nar.realtor/ click “Federal Issues,” then “Tax Reform,” you can see maps, statistics
11:10 –Another resource: http://homeownershipmatters.realtor/
11:30 – Need tax reform, but the National Association of Realtors does not agree with changes proposed and they are intentionally moving quickly
12:30 – Obamacare is an example of something that was hastily passed
12:53 – Speaker Ryan has been telling Republican Conference that they must pass the tax reform or else they won’t do well in the 2018 election
13:11 – Jamie believes that, if bill is passed, people in high homeownership rates will learn the implications of the bill and they’ll do poorly in 2018
13:32 – It’ll impact realtors, but NAR and realtors are really the only voice for homeowners on capital hill
13:56 – Realtors invest in communities and represent their districts in a meaningful way
14:16 – Contact your elected officials by texting “Action” to 30644
14:30 – The NAR wants to hear the voice of consumers, too: go to http://homeownershipmatters.realtor to respond to the consumer call to action

3 Key Points

The tax reform bill is speedily making its way through the house and senate.
Use the above resources to educate yourself on the tax reform proposals and see how it impacts you.
Tax reform is needed – but not on the backs of homeowners.

Credits

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