…to push for lowered State tax rates, empirically observed.
There are signs home buyers in metropolitan New York are pausing to consider the effects of proposed federal tax law changes, setting the stage for a possible chill in the market, brokers say.
The changes, in versions of bills in both the House and the Senate, likely would increase the cost of home ownership and reduce after-tax discretionary income for many mostly affluent home buyers in New York and other states with high state and local income and property taxes, brokers and analysts say.
This isn’t entirely true, though. The reduced deductibility of mortgage interest will lead to lowered house prices (and through that, downward pressure on rents, even in rent-controlled New York City) through two pathways. One is reduced demand for house ownership. The other is through a lesser interest deduction being factored into a house’s price—this one will impact primarily, the high-end houses bought with jumbo mortgages, contra those brokers and analysts.
Or a high-tax State can do nothing and suffer the consequences.
One couple, who looked for homes in the area last year, is coming down to see a house on an island off Miami Beach listed for $22.5 million over the summer, Mr [Jeff, a Miami broker] Miller said.
“People I have been working with were on the fence,” he said. “Now they want to move [to Florida]. The new tax bill was the nudge they needed to push them over.”
These are exactly the high-income, high-asset folks whose pockets high-tax States like New York want to pick.