N.C. Realtors’ group leader cites concern for tax reform provision
A provision in the tax reform bill passed by the General Assembly and sent to Gov. Pat McCrory on Thursday has drawn criticism from a trade group for Realtors that it might affect North Carolina’s housing market at a critical time.
The bill caps at $20,000 the itemized deduction that home owners can take for mortgage interest and property taxes.
Mark Zimmerman, the legislative committee chair for the N.C. Association of Realtors, worried that the move would increase the cost of buying a house at some price levels, affecting how much home buyers can afford and, in turn, affecting the housing market in general.
“(It would) affect home values, home owners across the state, and that would be a bad idea at any time, but it’s a particularly bad idea now that we’re beginning to get out, finally, from our real estate recession,” Zimmerman said. “It’s headed in the right direction; we just don’t want to take any of the momentum out of that recovery.”
Zimmerman said that the impact will vary by market because of differences in property taxes, but said it’s not going to affect the “very low end, obviously, at least now.”
But he raised concerns about future “erosion” of government policy supporting home ownership.
“This has been such an established part of our government policy at the federal and state level for so long,” he said. “The fact that this step has been taken here in this state should be a big concern to home owners. It’s hopefully not, but it could be the first step in more erosion of the support for home ownership by our state, and even our federal (government).”
Shelly Carver, a spokeswoman for Sen. Phil Berger, President Pro Tempore of the N.C. Senate, said in an email that the $20,000 combined maximum deduction for mortgage interest and property taxes should still cover working families.
She also argued that tax cuts in the bill will ensure that people looking to buy a home “will have more money, not less.”
“In addition, dramatically reducing the state personal and corporate income taxes will help draw new businesses and jobs to the state, boosting home ownership and our tax base,” she said in the email.