Real estate sellers and homebuilders in Southern Indiana are concerned the tax relief bill passed by the House will depress the housing market, which has gradually increased since the 2008 economic downturn.
The legislation passed 227-205, largely along party lines. Eighth District Rep. Larry Bucshon joined most of his Republican colleagues in voting in favor.
Highly complex, the bill purports to cut what the government collects in taxes by $1.5 trillion over the next decade.
The House bill preserves property deductions but caps them at $10,000. It also doubles the standard deduction from $6,350 for individuals and $12,700 for married couples to $12,000 for individuals and $24,000 for joint filers.
“It removes incentives for itemizing,” said Bill Pedtke, executive director of the Southwestern Indiana Homebuilders Association. “I suspect there will be major changes to that as it goes forward through the Senate. I have tried to make everybody aware that (the House version) would lessen the incentive for home ownership, not just home building.”
National associations of homebuilders and Realtors describe the House version of tax reform as friendly to corporations and not to young singles or families looking to enter the housing market.
Removing or capping deductions would have a negative effect on many, said Ryan Farmer, 2017 president of the Southwest Indiana Association of Realtors.
“I don’t see how you can eliminate all those deductions and call it a tax relief bill,” Farmer said.
Bucshon was not available for comment Friday.