Home shoppers say tax bill affects where they’ll live
Whether you already own a home or are thinking of purchasing, the new tax legislation pending in Congress poses serious questions.
Prospective buyers like Matthew Wie of Delaware and Joe Weber of California already are taking defensive steps. Weber owns a house and lives with his family in the San Francisco Bay area, and Wie and his wife own a home in Delaware. Both are looking to move and are considering shifting their home searches to locations where they’ll be less exposed to tax increases triggered by the new legislation.
Weber told me in an interview that as residents of California, he and his family face a dilemma: If the final tax bill slashes deductions of state and local taxes, purchasing a new home in hightax California will be significantly more expensive.
“I’ll only be able to afford less,” he said.
The Webers are seriously thinking about expanding their home search to either Seattle or the Reno, Nevada, area, where taxes and prices are much lower and Weber has identified good school opportunities.
Wie and his wife and daughter are contemplating a similar scenario — moving from Delaware to Pennsylvania.
“We’re relatively high earners,” Wie said in an email, “so the flat 3.07 percent Pennsylvania (income) tax would benefit us more than the higher property taxes or (the federal) tax change would hurt us.”
Wie’s wife’s employment location and local school quality also are key considerations.
Wie and Weber participated in a national survey of 900 prospective homebuyers conducted by realestate company Redfin. The survey found that 33 percent of people who expect to purchase within the next 12 months say they would consider moving to a different state if Congress eliminates SALT deductions.