Should GOP tax reform pass, the capital gains exclusion rules for selling a home would change, and state and local tax (SALT) deductions would be altered or potentially eliminated.
According to the National Association of Realtors, homeowners in New Jersey, Connecticut, and Illinois are among the states that would see the biggest price drops, ranging from 10 to 21 percent, Forbes reports. West Virginia and Wyoming would be impacted the least, with home values dropping between 5 and 10 percent.
Despite studies that have indicated that the mortgage interest deduction might not be good tax policy, it's been good for the real estate market. Without it, the NAR anticipates that housing prices will fall by at least 10 percent across the board. The NAR recently released a report breaking out on a state-by-state basis how the proposed tax reform efforts might hurt home values ... estimating that home values would fall in every state.
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