10k cap on SALT, 750k cap on mortgage. Double edged sword.
What’s your other option, pay $50k/year in rent for a single family home?
There are various calculators online, previously it has been often shown to be beneficial few thousands bucks more in buying house versus renting. But with these new caps, that benefit seems to be vanished.
Those benefits never existed “fully” to most people who paid AMT, AMT took out all those deductions. Now that AMT kicks in at $1M+ it’s the same for me as before. Makes no difference.
Doubled edged sword indeed. Sucks to bleed both ways.
True .. Means it it bad for market though as more companies are moving out SV or growing elsewhere and housing/cost of living is main issue.
Yeah, most alarming stat in recent news is some 40% of 25-34 yr old planning to leave bay area in next year. Even if just 1/4 follows through that doesn't bode well.. VCs are seeing startups happening more outside of here as well, too high a cost to do a 'garage startup'
Keep renting and then GTFO, better places to live than here.
Nothing changed for most people as income was too high to get the deduction. If are a lower earner and have 1m dollar house then yes your federal deduction was cut by 250k and California remained at 1m. Tax deductions are icing on the cake though and not why folks buy. Renting is absolutely cheaper, the bummer is just that rent will probably go up whereas a house is fixed forever and prop 13 is amazing :)
Sure FB, I think the concern is more for the more average tech workers where the deductions mattered.
Define average I guess? I assumed this was only related to CA.
Well for starters median housing income in bay area is some abysmal number like 85k/yr, and not all tech workers are FAANG level SWEs.
Maybe a decade ago, even Fremont median income is over 120k now. Fremont: Median household income $122,191, middle-class income range $81,461 to $244,382.
You're right that was the lower end of middle class. Seems like the median is around 115k or so in Santa Clara County. Still quite a bit out of whack if we are considering supporting the median home prices
120k median income probably won’t need more than 10k of mortgage deductions.
Who said anything about need? You could be a billionaire and still happy to save 10k from the IRS no?
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Yeah .. I think folks are going to realize that and it is going to put a dent in market unfortunately
A good number of Ppl have already figured out that .., that is the actual reason of market slow down in the bay this year, I believe.
It was slow just for the winter season. Up again last month.