Voice for Real Estate 76: Tax Reform, 1031, Remodeling, Post-Disaster

NAR opposes the first draft of the tax reform framework that the Trump Administration and Republican congressional leaders have released. It works against the interest of most middle-income homeowners. Other topics include 1031 exchanges, the best remodeling projects from a resale standpoint, and what to do after a natural disaster strikes to keep transactions on track. 

Segments:

  • Tax reform 
  • 1031 exchanges 
  • Remodeling 
  • Home sales 
  • After a disaster 

Transcript

Homeowners could pay more as Congress takes up tax reform

Solid information about 1031 exchanges are online in an NAR Webcast

And does kitchen remodeling add value? The research is in!

These stories and more on The Voice for Real Estate

Hi, I’m Stephen Gasque with the National Association of Realtors

The Trump Administration and the Republican leadership in Congress have released a tax reform framework, and it’s not good for homeowners.

First, although the plan leaves the mortgage interest deduction in place, only the wealthiest homeowners would continue to itemize.

That’s because most of the other deductions, including the one for property taxes and other state and local taxes, would be eliminated. As a result, most homeowners would take the standard deduction. And while that would be almost doubled, to $24,000 for a married couple, most would still see their taxes go up. The reason? That higher deduction would be offset by the elimination of the personal exemption and other exemptions for dependents. The loss of those provisions would hit large families especially hard.

Looking at the big picture, the changes would erase any difference between owning and renting in our nation’s tax code. And that could hurt the economy.

NAR hosted a Facebook Live event to talk about the framework and its chances for moving forward. Here’s NAR’s Evan Liddiard and Jamie Gregory on why the plan does not work for real estate.

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NAR has launched a comprehensive advocacy plan to make sure lawmakers know - a tax plan that leaves most homeowners worse off? will be vigorously opposed by Realtors. Stay tuned for more as the tax reform battle heats up.

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One of the most important provisions for commercial real estate is the 1031 like-kind exchange. It helps people build wealth over time by letting them defer taxes on the sale of investment property. That’s because they can roll the proceeds into another property, generating a return on money they otherwise would have lost to taxes.

Two veteran real estate professionals sat down with NAR to talk about the best way to structure these deals, and also why it’s imperative Congress not curtail the 1031 provision as it looks at tax reform.

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You can access that conversation on NAR’s YouTube page.

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No one knows better than a real estate professional the value of a quality remodeling project at resale. That’s why NAR is partnering with the National Association of the Remodeling Industry, to identify which projects generate the biggest return for homesellers.

In a report that looks at 20 interior and exterior projects, new and resurfaced hardwood floors generate the most value, typically returning all or nearly all of the cost. Kitchen remodels are also smart investments. Here’s NAR’s Jessica Lautz with more.

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The report is a resource you can share with your customers to help them make decisions that can improve the value of their home.

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Demand for homes remains high, but sales are stalled because buyers have little to choose from and prices are getting too high for many households. In NAR’s latest pending home sales survey, Contract signings declined almost 3 percent and little relief is in sight, according to NAR Chief Economist Lawrence Yun.

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NAR predicts sales to be down slightly this year because of the inventory crunch and also the impact of the hurricanes, although many of the sales lost due to the storms … are expected to happen next year.

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Hurricanes have captured the national attention this season, but natural disasters can strike anywhere. Recently, many parts of California, Montana, and Washington have been hit by massive wildfires. When these disasters strike, safety is everyone’s number one concern. But when it comes time to turn your attention to pending transactions, how do you pick up the pieces? NAR Associate Counsel Jessica Edgerton answers that question in the latest Window to the Law video.

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You can access that and other legal videos on NAR’s YouTube channel.

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Have you registered for the Realtors Conference & Expo in Chicago? It starts in just a few weeks. We’ll be reporting from the show! And, tune into the next edition of the Voice for Real Estate, to hear all the news coming out of the five-day event, the biggest real estate conference in the country. We hope to see all of you there.

And that’s our show for the week of Oct. 16. You can get more on everything we talked about today at The Voice for Real Estate page on nar.realtor. Thank you for joining us and be sure to join us again as we being you the latest news in The Voice for Real Estate.

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