Fed cuts rates by 1/4 point

[havaneselover]

There are much less taxpayers itemizing because of the SALT cap; most are taking the standard. There truly is NO tax advantage in home ownership anymore. Don't purchase a home for a tax advantage, there won't be one. If you are lucky, you will see appreciation. High tax states, NJ, NY, Ct home owners are getting killed!

Totally agree. I can no longer itemize (and was one of the ones whose taxes went up last year). And appreciation is definitely a crap shoot. When I look at my childhood hometown in SW CT they haven’t seen appreciation in 20 years (meaning prices now are about where they were in the late 90s).

 

[mjkacmom]

There are much less taxpayers itemizing because of the SALT cap; most are taking the standard. There truly is NO tax advantage in home ownership anymore. Don't purchase a home for a tax advantage, there won't be one. If you are lucky, you will see appreciation. High tax states, NJ, NY, Ct home owners are getting killed!

NJ here, thinking about paying off our mortgage now, first year we took standard deductions. Property taxes will still be over $1000 a month.

 

[barkley]

There are much less taxpayers itemizing because of the SALT cap; most are taking the standard. There truly is NO tax advantage in home ownership anymore. Don't purchase a home for a tax advantage, there won't be one. If you are lucky, you will see appreciation. High tax states, NJ, NY, Ct home owners are getting killed!

i remember as a newlywed in '91 the tax advantages being the BIG incentive to buy a home sooner vs. later. our cpa ran the numbers and when we realized our payment would be right at about what we were paying in rent and with the tax savings putting us w/a few hundred more in our pockets each month it was a deal we couldn't turn down. our first home didn't appreciate greatly in value but it did enough such that when we sold it 7 years later we were able to buy a bigger house/bigger mortgage BUT the tax savings to our by then higher incomes made total sense.

now with the salt cap, were we in the same position i don't know that we would opt for home ownership. depending on the rental market in a given area (maximum annual rent increase caps being a huge factor), more common movement between jobs/employers, the elimination of most employer supported pension plans...renting w/the plan to sock away as much as possible into retirement funds (ideally ones w/SOME tax advantages) might be much more appealing.

 

[Nick6300]

The biggest thing when I talk to people about paying off their mortgage is their overall plan.... Getting access to the funds is usually a pain in the event of a emergency. 3.25% is a pretty modest return in even the most conservative portfolios. Furthermore, even though SALT is capped at 10K you can still deduct the interest if the mortgage is under 750K. So that 3.25% can easily be closer to 2.75%

Unless I did something wrong, which is quite possible - I wasn't able to itemize and deduct the mortgage interest (1st yr since coming off apmt rent too, so pretty awesome), because the standard deduct was slightly higher with the $10K SALT... my RE alone was most of that. A great perk from that move from FL to IL.

 

[MillauFr]

Feel sorry for those that live in the high tax states. We are feeling the crushing burdens in Seattle of those moving from high tax states into Washington. The population is exploding. We are growing much too fast. Not that I want to pay high taxes but I almost wish the state start charging an income tax in order to slow growth.

 

[barkley]

Feel sorry for those that live in the high tax states. We are feeling the crushing burdens in Seattle of those moving from high tax states into Washington. The population is exploding. We are growing much too fast. Not that I want to pay high taxes but I almost wish the state start charging an income tax in order to slow growth.

i don't think it will happen any time soon-state income tax is unconstitutional in washington state and the state courts and legislatures have not shown any inclination to mess with the state's constitution.

 

[Nick6300]

Usually there's some sort of trade off to no state inc. taxes. In FL, it could be the brutal summers, the miserable traffic in the cities, the public education (by reputation - I don't know firsthand). But IL being one of the higher overall income tax burden states... I can't really think of a real upside of living here! We moved here because it was the place where we both found jobs. But maybe with a little more work experience we will be able to move out of this state.

 

[vacationer1954]

There is one thing that makes it a bigger difference: Florida's special sales taxes aimed at tourists help fund some of the operating costs of the state and its counties while being paid principally by tourists.

 

[SDSUrulez]

Unless I did something wrong, which is quite possible - I wasn't able to itemize and deduct the mortgage interest (1st yr since coming off apmt rent too, so pretty awesome), because the standard deduct was slightly higher with the $10K SALT... my RE alone was most of that. A great perk from that move from FL to IL.

I'm seeing a lot of this where the standard deduction means that unless you are having really large other deductions the home interest doesn't matter.

I'm not sure I'd say that moving from a low tax free state (FL) to a state where you are now paying income and sales tax is a great perk. You might get a slight write off on the federal side but going to pay significantly more to the state.

 

[MillauFr]

There is one thing that makes it a bigger difference: Florida's special sales taxes aimed at tourists help fund some of the operating costs of the state and its counties while being paid principally by tourists.

Which sales taxes are primarily paid by tourists?

 

[disneymagicgirl]

NJ here, thinking about paying off our mortgage now, first year we took standard deductions. Property taxes will still be over $1000 a month.

omg, what!? Our are $3800 a year on a $800k house. And no state income tax.

 

[vacationer1954]

Which sales taxes are primarily paid by tourists?

https://www.floridasalestax.com/flo...nuary/2015-florida-hotel-tax-rates-by-county/

 

[MillauFr]

https://www.floridasalestax.com/flo...nuary/2015-florida-hotel-tax-rates-by-county/

Thanks I was thinking you meant tourists paid a different rate at stores