Although obvious effects of the tax reform will be felt in filing returns in 2019, real estate pros advise caution.
By Betsy Kim |
Updated on December 27, 2017
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The new law caps state and local tax deductions for federal tax returns at $10,000. In addition, current deductions on federal returns for interest on mortgages up to $1,000,000 for individuals or $500,000 for married couples filing separately will change. Current mortgage interest deductions will not be affected but people taking out new mortgages will now only be able to deduct interest on mortgages of up to $750,000, or $375,000 for married taxpayer filing separately.
Hugh Kelly, Ph.D. in CRE, special advisor to Fordham University Real Estate Institute, points out that the federal government spends in states outside of New York on projects that boost local economies. This includes roads, military bases, and maintenance for air travel. The funding come from the excess of taxes paid by the higher income generating states, including New York.
In an effort to help redress this financial burden on New Yorkers, on the same day as the president’s actions, Gov. Andrew Cuomo issued an emergency executive order to allow collection of early and partial 2018 property tax payments before the end of 2017, under the current tax laws. Executive Order #172 allows online payments to be made and mailed payments to be postmarked on or before Dec. 31, 2017.
Experts say this cannot fully relieve the long-term negative consequences that the tax law will have for New York.
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