The surprise victory of Donald Trump rattled the real estate market. That’s mainly because the election of new president has created unanticipated impacts on the benefits of federal tax code, which favors renting a home or owning a one.The White House, Senate and the House would soon get under the control of a single party. As a result, the new tax plans would come into reality and cause an impact on the real estate market.
During the election campaign of Donald Trump, housing issues received much attention. The tax plans that were proposed during the campaign went through some changes as well. In fact, Trump took necessary measures in order to revise the tax plans in order to make them more compatible with the tax blueprint issued by House Republicans back in June.
As a result of the tax plans revisions, the existing seven tax brackets would be revised into three. Those tax brackets are as follows.
- The married joined filers who receive an annual income under $75,000 will be subjected to the federal marginal tax rate of 12%.
- Married joint filers who get an annual income in between $75,000 and $225,000 would be subjected to a tax rate of 25%.
- Married joint filers who receive an income of over $225,000 will be subjected to a tax of 33%.
In addition to these, the single filer rates will be associated with the same brackets, but based on half the amounts of incomes for married joint filters. Moreover, the capital gains rate would be fixed to 20%. One of the most impressive facts about the tax plan introduced by Donald Trump is the disappearance of controversial Obamacare tax, which was 3.8%.
The tax plans introduced by Donald Trump are more intriguing. He has taken necessary measures in order to simplify the tax system. As a result, people who earn a high income would be limited to all sorts of itemized deductions. It would be $100,000 for singles and $200,000 for married joint filers.
In the tax plans introduced by Donald Trump, no special limits have been mentioned about the mortgage interest deductions. Therefore, it would be totally from the perspective of a home buyer or a homeowner. In here, nothing would jump out as an objectionable thing. Trump has realized the importance of maintaining simplicity in tax plans and it is something good. As per the original tax plan introduced by Donald Trump, charitable deductions and mortgage interests have been exempted from all sorts of modest limitations, which were included in the proposal of Hillary Clinton.
However, these tax plans aren’t likely to come into play in the near future. It would take several months of debates and committee hearings and even lobbying for them to come into play. However, it is extremely important for everyone to have a clear understanding about these changes in taxes in order to stay away from hassle in the future.