Impact of Tax Reform Options on Owner-Occupied Housing

Impact of Tax Reform Options on Owner-Occupied Housing
The National Association of REALTORS® (NAR) engaged consulting firm PricewaterhouseCoopers to review the impacts of an illustrative comprehensive tax reform option that would: lower and consolidate marginal tax rates to three rates with a top rate of 33 percent; double the standard deduction; eliminate all itemized deductions, other than charitable contributions and mortgage interest; eliminate the Alternative Minimum Tax; and cap the tax rate on pass-through business income at 25 percent. Read “NAR Issue Brief: Summary of NAR Study on Tax Reform” here. Download the full report here. Some the highlights are below:

  • Homeowners with an adjusted gross income (AGI) between $50,000 and $200,000 would see an average annual tax increase of $815. Non-homeowners with AGI in the same range would see an average annual tax reduction of $516.
  • Home prices nationwide in the short run would fall by 10.2 percent as a result of the comprehensive tax reform option.
  • The combined tax savings for those who claim the mortgage interest deduction (MID) and real estate tax deduction would fall from over $1.3 trillion for fiscal years 2018-2027 under the current law to just $232 billion under the comprehensive tax reform option, a drop of 82 percent.
  • An estimated 83 percent of all personal income taxes are paid by homeowners.
  • Non-homeowners, across all income categories, would see tax decreases on average.

Source:; 6/1/2017

Courtesy of:

Steve Sisman

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