Finalized Tax Cuts and Jobs Act Bill - Details Affecting Real Estate

Finalized Tax Cuts and Jobs Act Bill - Details Affecting Real Estate

By Emilio DiSpirito Radio Show Host www.TheRoundTableRadio.com

Realtor Emilio DiSpirito in the iHeartradio studios

The highly anticipated bill dubbed "Tax Cuts and Jobs Act", pushed by the Republicans, has been finalized on Friday, December 15th 2017 and will go to both Houses of Congress Tuesday, December 19th for full approval. Once thereafter it will cross President Trump's desk for his blessing. 

There is a lot of concern that certain details like deductions for mortgage interest and property tax would disrupt the real estate market. As a Realtor and member of agents selling in the top 1% of the country, I strongly disagree. Let me explain.

1. This bill serves to help the middle class (about time!) with lower tax brackets and double the standard deduction! Federal tax deductions from $6350 to $12,700 filing single and from $12,000 to $24,000 when filing married! 
1. Think about folks retiring or in retirement! They need deductions more than anyone!
2. "Main Street" business, aka small business owners will find that their tax rate will be reduced up to 29.6%!
1. When local business owners pay fewer taxes, they invest in their business and create jobs. 
3. Corporations in America will be paying -14% less in 2018 than they do today! Currently, at 35%, America is the highest taxed country in the industrial world when talking corporations! 
1. When companies earn more, they hire and spend more. This stimulates all income classes through job growth.
4. When there are jobs, there is additional income to be spent, money to be lent and the economic wheel is turning.
5. Currently, homeowners can deduct up to $1.1 million of their first and second homes in interest deductions. 
1. Under the new bill, two things happen.
1. All current mortgages are grandfathered in and nothing changes. 
2. All new home purchases on 1st and 2nd homes will receive interest deductions on the first $750,000.
6. Right now you can write off all of your property taxes on your first home, land and vacation homes. 
1. The bill will allow for a deduction of up to $10,000 total on property taxes. 
1. Now allowing taxpayers to write off Sales Tax, Income Tax or Property Tax. This allows taxpayers in all circumstances, property owners or not to benefit!
1. Imagine car sales, luxury goods sold, etc! They will all increase!!

Other Important Factors That Will Increase Spending:

1. No more Obamacare penalties!
2. Relief for medical bills!
3. Expanding ability for citizens to contribute more to non-profits!
4. Allowing extra support for Grad students!
5. Significantly improves America's position on energy production
6. Hurricane Relief

Stay tuned for additional information as it comes in! www.TheRoundTableRadio.com

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Barry Habib joins Emilio DiSpirito on The Round Table to Talk New Tax Plan and How It May Effect Real Estate!

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Real Estate Property Taxes, Where Do They Go and What do They Do?

By Emilio DiSpirito, Top Real Estate Agent in Rhode Island, Real Estate Blogger & Radio Show Host with the Real Estate Radio Network, Representing the Rhode Island Market. 

This year, homeowners in towns & cities throughout Rhode Island have seen an increase in their real estate taxes. Many citizens are upset about the increase and this blog will be a transparent place for Rhode Islander's to see where we stand and where our tax dollars go! After a ton of research.. Cities and Towns in Rhode Island clearly do not tell you where your tax dollars go without a ton of digging. It's my goal to make Rhode Island real estate information obtainable in a quick and reasonable manner to our current and soon to be residents! :) 

How to save money on property taxes!  

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 According to WalletHub.com, when ranking states from lowest to highest in tax rates, 1 being the lowest and 50 being the highest, Rhode Island currently ranks 42! At an average of 1.61% the properties value, taxes are assessed per $1,000 of the real estate value. 

In example: A $176,000 home in Rhode Island holds a real estate tax of roughly $2829 per year which is nearly six times the amount of property tax for the same house ($489 per year) in Hawaii. Hawaii is the #1 best state for lowest property taxes in the United States.

So first off.. Why are our property taxes going up?! Politicians will tell you that the "good news" is the tax rate has not increased... However, the valuation of homes has. In an increased market, cities and towns are roughly one to two years behind in actual values on the way up and also on the way down. Thus why it's common you will see "assessments" lower than actual sales prices in an escalating market and higher in a falling market. 

Rhode Island property taxes are due quarterly and are paid six months in arrears meaning after the taxes are owed. When you take out a mortgage with an escrow program, taxes are collected in your mortgage payment monthly and are then paid quarterly by your mortgage servicer. Much easier than having another bill to remember to pay. Real Estate property taxes are also tax deductible, as they should be.

So the biggest question is.. Where do our property taxes go? What do they fund? Well, not so surprisingly, the RI town and city governments are not so transparent on where the money goes... After much digging, we did not find a RI page that disclosed this but found on google mainly what property taxes cover the following:

• ANIMAL CONTROL
• LOCAL ROAD REPAIRS & SERVICES
• POLICE DEPARTMENT
• "SAFE" DRINKING WATER (what if you have a well... why should you pay for city water?)
• TREATMENT OF SEWAGE (hmmm... what if you have a septic?? why are you paying this??)
• Building Code Enforcement/Saftey
• Fire Station
• Community Centre Sewage 
• Emergency Planning 
• Heritage Planning / Zoning

Hope this information was useful to you! For further details and any real estate information, feel free to contact me direct: 401-359-2338 or Click Here