Although much of the furor over the proposed tax reform plan from the Republican-led House has focused on the reduction to the cap for the mortgage interest tax deduction, it is the proposed changes in capital gains that may make the biggest difference. In fact, Mark Zandi, chief economist at Moody’s Analytics, told The Chicago Tribune that the tax changes could reduce prices in the most expensive markets by 10 percent. Price escalation has slowed over the past couple of years, and CoreLogic has reported that over one-third of the top 100 markets are overvalued, so this may be part of a larger correction. Boon or curse? For the ultra-luxury market (the $10 million and up range), the tax plan is a boon. Buyers who can afford that price point are usually business owners or those with inherited wealth. They will likely benefit from the low corporate tax rate and pass-through rates from S Corps and LLCs. The tax plan from the House also follows through on President Trump’s st…
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