A happy, healthy New Year to you all! With this new year came a new tax bill that has everyone buzzing. Today, I wanted to talk about what effects this new law will have on the real estate market in Bucks County.
To preface the discussion, I’m not a tax lawyer or an accountant, so in order to understand how exactly you’ll be affected the changes, it’s critical that you talk to a CPA or tax attorneyfamiliar with the law since it won’t affect everyone the same way.
The most important changes as far as homeownership goes relate to the state and local taxes. There is now a $10,000 limit on state and local taxes, which will impact people in higher tax brackets like our neighbors in New Jersey.
Another key change is that mortgage interest deductions are capped for new mortgages only. This means that existing mortgages will go unaffected. The cap is now set at $750,000, so anything above that is non-deductible.
The National Association of Realtors has suggested that in some high-tax states, there could be as much as a 10% reduction in values. In a weird way, this could be helpful for the real estate values in Bucks County, Lower Makefield, Yardley, Newtown, Washington’s Crossing, and Upper Makefield.
After the tax bill was passed, I received four or five calls from homeowners from the more expensive areas of New Jersey saying that, because of the bill, they’d be looking to move out of the state. In general, Bucks County is the less expensive area to live in.
If you have any further questions about this or other real estate topics, feel free to reach out to me. I’d be glad to speak with you.