Do Realtors support the GOP tax bill?

A: Homeownership has been the cornerstone of the American dream, as it offers significant tax advantages to all class levels and the opportunity to provide stability for families to help them prosper.

With tax reform on the Republican agenda, the National Association of Realtors is voicing concern against the proposed tax reform by the Trump administration, which may undermine the tax advantages for homeowners.

The mortgage interest deduction and state and local tax deductions are two widely used tax savings tools for tax filers in the Bay Area, and by limiting the deduction for local and state taxes and diluting the impact of the deductibility of mortgage interest, the proposal is an assault on homeownership.

The tax reform proposes to increase the standard deduction for single and married people, which will likely result in homeowners opting for the standard deduction instead of the itemized deduction, in which they could deduct their mortgage interest. It places the two tax incentives at risk and it negatively affects homeownership by eliminating some of the incentives to buy a home.

Moreover, it would decrease property values, because the lack of tax advantages will result in fewer buyers motivated to purchase, instead of continuing to rent. Thus a smaller buyer pool would result in fewer offers made, ultimately lowering home values.

Adam M. Touni, Pacific Union Real Estate, (650) 336-8530, atouni@pacunion.com.

A: Realtor organizations and home builders oppose the newly proposed tax bill because it will limit the deductions for real property taxes and mortgage interest, and will raise taxes for middleclass families, especially in California.

Decades ago, Congress passed legislation to encourage homeownership by allowing families to deduct state and local taxes and mortgage interest on their income taxes.

The rationale is that homeownership is the primary vehicle for building long-term wealth in the middle class and a source of stability, pride and cohesiveness for communities.

According to the National Association of Realtors, roughly 20 percent of the nation’s economy is dependent on real estate. Those businesses directly tied to homeownership include industries that supply raw materials and manufactured goods as well as home enhancement, maintenance and repair services.

The new tax bill will reduce the benefit of homeownership across the country, but it will have the strongest damage in high-cost areas, such as the California.

Real estate values tend to be higher in many of the blue states in last year’s election and these are the places where people are most dependent on itemizing to reduce their taxes.

John Solaegui, Paragon Real Estate Group, (415) 999-0673, jsolaegui@paragon-re.com.

A: According to reports in the Washington Post and Wall Street Journal, the legislation would slash the popular mortgage interest deduction while chopping the corporate tax rate from 35 percent to 20 percent. Currently, Americans can deduct interest payments made on their first $1 million of home loans. But for new mortgages, it would only deduct interest payments on the first $500,000 worth of loans.

The bill would also scale back a provision for Americans to deduct taxes they pay to state and local governments from their federal tax bill. Tax credits for electric cars would be eliminated. Americans would no longer be able to deduct moving expenses or alimony payments. Large college endowments would pay taxes on their income in a way that treats them more like private foundations.

Homeownership still hovers around a 50-year low today — a major advantage of homeownership is deductions. This bill could perhaps discourage others from buying a home, and not allowing the average homeowner to deduct their property, state and local taxes could potentially raise their tax bill up to $3,000 annually.

There seems to be a push to pass tax reform by the end of the year. However, cutting tax benefits for average citizens while helping corporations cannot be the answer. Our administration needs a harder look at the numbers instead of rushing to achieve a political goal. Par Hanji, Paragon Real Estate Group,

(415) 307-5110, par@parhanji.com.