Colorado Association of REALTORS | Potential Change in GOP Tax Comes at a Cost
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Potential Change in GOP Tax Comes at a Cost

Potential Change in GOP Tax Comes at a Cost

Changes in the tax code could have pricey implications for homeowners if the GOP Tax Proposal passes.  Cuts elsewhere are causing Congress to find other ways to make up the money.  One area they are looking to make up the money is taxes associated with real estate.

 

Currently, homeowners are encouraged to stay in their home for two years and are able to avoid paying capitol gains taxes if they move out of their home after two years of residence.  However, the change in the tax code would increase from two years to five years.  Meaning, that any homeowner who moves from their residence under the five years will have to pay the large tax obligation.  This change brings to light multiple issues that are concerning.  One being, homeowners will hold onto homes longer resulting in a slower market that will have less inventory.  Also, this change may occur without peoples knowledge.  A homeowner may go to sell their house after two years thinking they are safe from paying the tax obligation, to later discover they were not and are now stuck with a hefty tax bill.

 

Another consideration is the proposed Tax Deduction changes.  Essentially, the House and Senate are looking to pull deductions that are given for property taxes above $10,000 and interest on mortgage that is above $500,000.  Currently, many are unconcerned because Colorado is fairing well on property taxes and mortgage interest so this change would only affect a small group of people.  However, there is a concern about what this would mean for the future.  The market is growing fast and it would not be surprising to see an average at or above these numbers occurring in the years to come.  So while this might not be a concern now it will be in the future.

 

REALTORS® and real estate professionals are encouraged to understand these potential changes and help inform the public and their clients on the subject if the change does occur.  It’s important that consumers understand and are aware of the implications of these changes.

 

Read further on the GOP Tax Proposal with the original article sourced from, The Denver Post By Aldo Svaldi December 7, 2017

 

To View the Full Article Click HERE

 

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