According to NAR the “Tax Cuts & Jobs Act” has ‘punched a huge hole’ in incentives to own a home.
The law, passed by Congress at the end of 2017, capped mortgage interest deductions (MID) for primary and secondary residences at $750,000 (down from $1 million), while capping state and local tax deductions (SALT) at $10,000 (there was no cap previously).
In 2017, about 32% percent of tax filers itemized their deductions, but only about 13% of tax filers are expected to itemize for 2018.
NAR expects the number of tax filers claiming the MID to fall by 20 million people, or 60%, and anticipates the amount of the deduction will decline by almost $40 billion, or 62%.
Meanwhile, the trade group predicts the number of SALT deduction claimants will fall by almost 27 million (a 62% drop) and the amount of the deduction will decrease by nearly $50 billion, down 71%.
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