- Proponents and opponents of the Republican tax framework agree that it will affect the housing market.
- The National Association of Home Builders says the plan if enacted, will be a boon to homebuilders and to the overall economy.
- But the National Association of Realtors says the GOP tax proposal may prove onerous to millions of American homeowners.
Republicans’ plan to overhaul the U.S. tax code was outlined in its clearest form to date in an announcement on Wednesday.
Yet even with new details to dissect on how the majority party envisions a simplified federal tax system, the relatively terse tax proposal leaves unclear the effect it will have on different groups of Americans, as well as different industries.
The bifurcated reactions from groups within the housing industry alone offer a clear example.
The National Association of Home Builders heralded the tax plan as “a positive step in the right direction” in a statement on Wednesday.
“By lowering the pass-through rate, the plan will reduce the tax bill of thousands of small businesses and help to spur job and economic growth,” NAHB Chairman Granger MacDonald said in the statement.
For homebuilders, the retention of the Low Income Housing Tax Credit and a few small business deductions may very well ameliorate the tax burden on, for instance, the builders of the affordable rental housing.
NAHB CEO Jerry Howard echoed that opinion on CNBC’s “Power Lunch” Thursday.
“When you put more money into the pocket of the average American, the economy expands. That’s a good thing,” Howard said.
But viewed from another angle in the same industry, the tax plan poses a significant threat to millions of homeowners.
If enacted, the plan “could lead to a tax on homeownership for millions,” the National Association of Realtors said in a statement on Wednesday.
According to the NAR, the framework would ditch certain deductions and exemptions that incentivize buying a home, such as a state and local tax deductions.
“The result would all but nullify the incentive to purchase a home for most, amounting to a de facto tax increase on homeowners, putting home values across the country at risk and ensuring that only the top 5 percent of Americans have the opportunity to benefit from the mortgage interest deduction,” the NAR said.
Courtesy of CNBC and credited to Kevin
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