The Register Citizen (Torrington, CT)
New tax law’s effect on real estate sales questioned
While some in the tristate area real estate industry have sounded the alarms about what the new federal tax plan could mean for the housing market, one local brokerage executive remains unruffled.
“I’ve been reading a lot about what people think will happen, and I can’t help but think how people actually make their decisions around buying a home,” said Ryan Raveis, co-president of William Raveis, which is based in Shelton and has offices around Connecticut and New England. “People don’t making homeownership decisions based on the tax code; they’re more driven by the place
they want to live and school system. ... We’re much more optimistic about Connecticut in 2018.”
The federal Tax Cuts and Jobs Act of 2017, which President Donald Trump signed into law on Dec. 22, limited or eliminated many itemized deductions previously allowed by the Internal Revenue Service, such as those for state and local property taxes, as well as mortgage interest. Under the new law, homeowners can itemize deductions on up to $10,000 of state and local property taxes.
Leading up to the law’s passage, Michael Barbaro, president of the Connecticut Association of Realtors, voiced his dismay. “We ... believe this is particularly detrimental to our housing market, as it eliminates many of the key deductions that are instrumental in the home-buying process,” he said.
Though many southwestern Connecticut homeowners will likely see their tax bills rise, some Realtors along the state line have said those communities could lure homebuyers from New York and New Jersey.
“Overall, it won’t have a huge impact on the housing market. In the long term, we could get better growth out of it. That will be a hot topic in the 2018 governor’s race . ... I can’t underscore how important bringing jobs to Connecticut is and the importance of what Connecticut does to attract people to its cities.”
Ryan Raveis, co-president of William Raveis
“We all think it may drive some (buyers) from Westchester (County) and New Jersey here because taxes are so much lower,” Greenwich Realtor Jane Brash of Coldwell Banker said several weeks before the plan became law.
Raveis said his brokerage is more focused on tracking indicators he says better reflects factors that drive homebuying decisions. “We’re less concerned about the tax code than we are about average earnings of workers in the state, and we’ve seen that decline in recent years,” he said. “This (tax law) has been a big topic for a long time, but we can refocus on things that are really important to home values. The tax plan will have an impact but it won’t be top of mind when people are buying a home.”
According to Raveis, border towns already benefit from their lower property taxes relative to New York and New Jersey. They will likely continue to gain from that tax comparison, he said, but added, “I think some of those predictions are overblown.
“Overall, it won’t have a huge impact on the housing market. In the long term, we could get better growth out of it. That will be a hot topic in the 2018 governor’s race . ... I can’t underscore how important bringing jobs to Connecticut is and the importance of what Connecticut does to attract people to its cities.”