Eliminating the SALT deduction will ultimately reduce aggregate spending on public education, infrastructure, public safety and other locally and state-funded services. Many in Congress believe improving such services is necessary to make the U.S. more productive and competitive and to grow its economy. Ironically, eliminating SALT could have the opposite effect.
The new tax reform act lowers the cap on the mortgage interest deduction and extends the holding period for capital gains inclusion. While the latter is probably good, the former will do little for homeownership.
The new tax reform act provides for a new and novel way to depreciate new capital investment—plant, equipment and buildings. In theory, the positive impact could be significant. In the current context, however, expensing raises some concerns.
Real estate cap rates' decline alongside government interest rates over the past 30 years has buoyed returns, with property values at pace with inflation but property net income falling behind. If cap rates begin to rise, appreciation could vanish.
The prospect for suburban living has just gotten a lot brighter. Suburban houses will not only be able to generate the energy they need internally, but also fuel their cars—and all with absolutely no CO2 emissions.