Washington witnessed the proposal for tax return last week and with this the maximum amount of deductibles from interest expense of residential property mortgages will be lowered down to $500,000 instead of $1 million. Deductions will only be honored if the property is a primary residence. Businesses including real estate can now process their Florida application for a Tax ID but they may have other concerns right now as to the impact of the proposal to the real estate sector in Florida. Local experts shared their views regarding the matter.
Christopher Zoller who is the chair of Miami Association of Realtors said that deduction on the mortgage interest is essential to people who are borrowing. In the case of South Florida and Miami, homeowners consider the deduction from their property taxes as a huge incentive as it is beneficial to them. If the proposal is to take effect, the number of home buyers will be affected because of the loss of incentives. Therefore, Zoller concludes that the elimination of the deductions can hurt South Florida’s buyers and homeowners.
Steven Fischler, the president of SRF Ventures real estate advisory firm, believed the opposite. He thinks that it will not have any negative impact on the Miami market because mortgage deduction is not one of the reasons why buyers purchase their property. Instead, he stresses the importance of removing the tax deduction from both local and state income especially in the northeast part of the state. He senses that a lot of people will be relocating to South Florida soon.
The CEO of the Keyes Company realty, Mike Pappas, said that they are fighting to amend the proposal and retain the deductions on mortgage interest. If it does not change, they expect it to have an income for short-term but not for a long time. Buyers are more concerned about owning a home rather than focusing on the deduction on interest rates.
Real estate businesses are currently filing for Florida Application for a Tax ID but the senior managing director of LeFrak developers, Camille Douglas, said that many people will be disappointed by the absence of these incentives but Florida will be able to manage compared to California and New York since their taxes both state and local are higher.