With Tax Day coming up, homeowners will be some of the first to see how the Trump administration-enacted Tax Cuts and Jobs Act affects the way that they file.
Not only will individual homeowners see a change, entire housing markets could be affected. Louisiana-based CPA with Young and the Invested Riley Adams tells Business Insider that changes to tax law may slow down hot markets, including Los Angeles, San Diego, and San Francisco in California, and Seattle. Adams also notes that home price growth has already slowed and more for-sale homes have come online in the wake of certain tax reform measures impacting SALT deductions going into effect, "As people reconcile the heightened cost of homeownership from a tax perspective, I suspect home-price increases will continue to abate."
In addition to the doubling of the standard deduction, Riley pointed to a change in the treatment of state and local taxes. Under the previous tax law, there was no limit on the amount of these taxes you could deduct against your federal income. In areas with a high cost of living, this helped people shoulder the cost burden of high taxes on property, income, and sales.