The new plan to lower taxes is going to have another side effect – it is going to lower the values of homes in the state of New York. The new tax code will increase the standard deduction by a factor of two, eliminating the need for most households to itemize their property taxes. According to experts, this will depress real estate values.

Another factor will be the new tax regulations that include a cap on how much property tax people can claim on their tax returns each year. The limit will now be set at $10,000 – a tremendous amount for most states – but 20% of New York residents pay more than this amount.

In addition, the government is implementing how much mortgage interest new buyers can claim on their returns. The current system allows borrowers to claim interest on as much as $1,000,000 in debt related to housing. This figure is scheduled to drop to $500,000.

New York to be Among Hardest Hit

Opinions vary, but some economists believe the housing market will see a 7% average decline in prices nationwide. Others believe it will be around 3%, affecting home equity values, the single most important means of savings that most homeowners have. Economists predict that in some areas house prices will fall and that in others, we will see 18 months of stagnating prices before the market adjusts to the new tax code.

New York will be among the hardest hit states in the country. Westchester county is predicted to see a loss in home values of 10.4%, New York county is expected to see a 9.5% loss, and Nassau county is projected to drop by 9.2%. Putnam and Rockland counties may see 8.6% reduction, and Orange county is slated to reduce by 7.3%.

Sokol Group is a firm experienced in negotiating lower tax bills for their clients. If you feel your tax bill is too high, contact Sokol Group to initiate the tax grievance process. Working for clients in the Hudson Valley, Rockland, Orange, and Westchester counties, Sokol Group looks forward to doing business with you.

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