Senate Tax Reform Will Drag Down Essex County Home Values: Report

ESSEX COUNTY, NJ — Essex County homeowners may suffer a big hit to their property values if the U.S. Senate-backed tax reform plan comes to fruition, a recent study says.

According to Moody’s Analytics, homes in Essex County are projected to lose about 10.5 percent of their value under the GOP plan, which was passed in the dead of the night last Saturday with little debate and no formal hearings.

Experts say that the $1.6 trillion legislation includes tax cuts that will mostly benefit corporations and the ultra-wealthy. With the Senate bill passed, lawmakers will move to resolve the differences with the tax legislation already approved by the House of Representatives. Once Congress has reconciled the two versions, President Trump can then sign the final legislation into law.

• See related article: Late-Night Senate Tax Vote May Be 'Disastrous' For New Jersey

Why would the Senate and House tax plans hurt real estate prices in Essex County? According to a report from Slate:

“For starters, both would double the standard deduction that most Americans claim on their returns each year, which would drastically reduce the number of families who bother to itemize. That would render the tax benefits of owning a home, such as the mortgage interest deduction, useless for much of the country, weighing on real estate prices. The House and Senate bills also cap the property tax deduction at $10,000, which is high—except by the standards of the New York Metropolitan area. In New Jersey, about 30 percent of homeowners pay more than that on their property tax bill; in the Empire State, about a fifth do. The limit on property tax deductions is the biggest driver of price declines in Moody’s model.”

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