Will the new tax laws slow Seattle’s housing market? (Part 2: New deduction limits)

Let’s finish off our discussion of how the Seattle-area real estate market may be affected next year by the changes to the tax code. In yesterday’s post we discussed the doubling of the standard deduction, and concluded that it is likely to have very little effect. Today let’s look at the other two big changes: The reduction of the mortgage interest deduction cap from $1M to $750k and the capping of local sales, income, and property tax deductions at $10k…

Income Taxes Paid by Home Price

Will the new tax laws slow Seattle’s housing market? (Part 1: Doubled Standard Deduction)

Now that the big GOP tax plan has passed, let’s have a look at how it may affect the Seattle-area real estate market next year when it goes into effect.

There are two major changes to the tax code that will matter to home buyers and home owners: the doubling of the standard deduction (from $12,700 for a married couple in 2017 to $24,000 in 2018) and the reduction of the mortgage interest deduction cap from $1 million to $750k.

First up let’s look at the doubling of the standard deduction…