Homebuilders gloomy; asset managers relieved

Proposed changes in the GOP tax plan could affect homeowners in more expensive neighborhoods and car buyers interested in electric vehicles. Investors in tech companies could see higher dividends. Future retirees and asset managers are happy about a change that didn’t materialize. A look at how the GOP tax plan could impact certain industries:

Homebuilding

The tax plan contains some unpleasant surprises for those thinking about buying a new home, particularly in high- cost areas. As a result, shares of homebuilders dropped, with luxury homebuilder Toll Brothers leading the decline.

The plan would limit the mortgage interest deduction on newly purchased homes to the first $ 500,000 of the loan, instead of the present $ 1 million limit. The plan also caps the deduction for property taxes at $ 10,000. Svenja Gudell, CEO of housing data provided Zillow, said the changes could raise the tax bill for high- income homeowners in high- tax states, such as New York, Florida and California. Jerry Howard, CEO of the National Associated of Home Builders, said any slowdown in the housing market in those states could put other markets at risk.

Electric vehicles

Car buyers might be less charged up about electric vehicles. The plan eliminates a $ 7,500 federal tax credit for buyers of electrics after the current tax year. Industry analysts and environmental groups quickly predicted a plunge in EV sales. Even with the credit, electric vehicles are less than 1 percent of U. S. auto sales, and that’s likely to decline further.

“If you eliminate the tax credit, it’s going to be a big whack to electric vehicle sales,” said Gartner analyst Michael Ramsey.

It’s not for certain yet that the credit is gone. General Motors said in a statement that it will work with Congress to keep the incentive.

Tech companies

A provision that permits multinational corporations to repatriate foreign profits they’ve stockpiled overseas at a one- time 12 percent rate could be beneficial to technology companies and their shareholders.

Scott Kessler, an analyst with CFRAResearch, said a lot of tech companies such as Apple, Oracle, Microsoft and Cisco were hoping to bring back their overseas profits “at a far reduced rate from current 35 percent.”

“For a lot of these companies you are talking about tens of billions, or in the case of Apple, hundreds of billions of dollars,” Kessler said.

Asset managers

Future retirees and asset managers exhaled after HouseRepublicans decided to leave the 401( k) retirement account alone.

Congress had been considering changes that investors feared would cause workers to sock away less in retirement savings each year. Such a change would mean smaller flows into the mutual funds and exchangetraded funds run by T. Rowe Price, BlackRock and other asset managers, reducing the fees they could earn.