Texas realtors are wondering what the fallout will be after the new GOP tax law goes into effect and changes the property tax deduction homeowners benefit from.
How it touches your pocketbook may depend on how you file your taxes. If you itemize your deductions now and your property taxes are $12,000 per year, under the new tax plan you can only claim $10,000 of those taxes in deductions.
A Metro Tex Association of Realtors map shows the areas from far southwest Tarrant County to Collin County where average property taxes are over $10,000.
“That’s going to affect us with our properties because there is a lot of items that we might deduct that don’t fit that standard deduction,” said James Martin, president of the Metro Tex Association of Realtors.
Dr. Cullum Clark, director of SMU’s Economics Research Center, said the first thing people need to do is to determine whether they will take the standard deduction.
Under the Trump tax plan, standard deductions double from $6,000 to $12,000 for an individual and $12-24,000 for a family.
Clark said if people choose the standard deduction they will be unaffected.
“They should decide whether to buy the house based on whether they can afford the house and they like the idea of living there,” Clark said.
Clark added that the decision to itemize depends on how big your mortgage is and how much you pary in property taxes.
Martin worries North Texas could see a big impact.
“I think the biggest thing to look long term is that it doesn’t account for appreciation. As we know properties are increasing, the DFW area is a hot market in real estate and so I think overtime we could see a greater impact from this bill,” Martin said.