It proposes a new limit — $500,000 from the current $1 million — for home-mortgage-interest deductions.
Millennials and buyers in expensive markets would be most affected by the disappearing homeownership incentives.
President Donald Trump's new tax plan just dealt a blow to many would-be homeowners.
The 429-page GOP tax plan, called the "Tax Cuts and Jobs Act" was revealed on Thursday and is being billed as a boon for hard-working middle class Americans.
But Republicans have proposed paring down popular homeownership incentives, which would likely affect millennials and millions of people living in high-cost housing markets.
RELATED: Homes in these 10 markets are selling like hotcakes
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Homes in these 10 markets are selling like hotcakes
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Homes in these 10 markets are selling like hotcakes
10. Boston, MA
Days homes are listed on Zillow: 74
Percent of listings with price cut: 8.9%
Source: Zillow
Photo credit: Getty
9. Charlotte, NC
Days homes are listed on Zillow:76
Percent of listings with price cut: 8.6%
Source: Zillow
Photo credit: Getty
8. San Diego, CA
Days homes are listed on Zillow: 64
Percent of listings with price cut: 9.0%
Source: Zillow
Photo credit: Getty
7. Los Angeles, CA
Days homes are listed on Zillow: 69
Percent of listings with price cut: 7.9%
Source: Zillow
Photo credit: Getty
6. Portland, OR
Days homes are listed on Zillow: 64
Percent of listings with price cut: 7.7%
Source: Zillow
Photo credit: Getty
5. Sacramento, CA
Days homes are listed on Zillow: 62
Percent of listings with price cut: 7.5%
Source: Zillow
Photo credit: Getty
4. Seattle, WA
Days homes are listed on Zillow: 53
Percent of listings with price cut: 6.6%
Source: Zillow
Photo credit: Getty
3. Denver, CO
Days homes are listed on Zillow:57
Percent of listings with price cut: 6.5%
Source: Zillow
Photo credit: Getty
2. San Jose, CA
Days homes are listed on Zillow: 50
Percent of listings with price cut: 6.0%
Source: Zillow
Photo credit: Getty
1. San Francisco, CA
Days homes are listed on Zillow: 51
Percent of listings with price cut: 5.4%
Source: Zillow
Photo credit: Getty
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The tax plan cuts the $1 million limit for the home-mortgage-interest deduction in half. The deduction allows homeowners to write off the interest they pay on home loans, effectively reducing their taxable income. The bill would apply to new home purchases and make it so homeowners can only deduct interest payments on up to $500,000 worth of home loans.
In previous generations, that may have been a typical mortgage amount for a first-time homebuyer, but today's young people are different. Millennials are "skipping starter homes," Zillow CEO Spencer Rascoff said, and moving straight to the $1 million range when its time to buy their first house.
The mortgage size on a $1 million home would be $800,000 — assuming the homebuyer makes a down payment of 20% of the purchase price, though some are putting down payments as low as 10%. Under the proposed bill, the homeowner could only deduct interest on the first $500,000 of the loan, leaving them to shoulder the rest of the principal and interest payments without the benefit of a tax deduction.
Home to Whistler Blackcomb, one of the largest ski resorts in North America, Whistler has become synonymous with breathtaking scenery and world-class skiing and snowboarding. Celebrities such as Sarah McLachlan have been drawn to the snowy escape, which boasts world-famous snow activities including snowshoeing, tobogganing and ski jumping at the site of the venue for the Vancouver Winter Olympics, Olympic Park, as well as the Whistler Film Festival and a renowned après-ski restaurant scene.
Set within Canada’s first national park, Banff is a resort community with a rich cultural and natural history, recognized globally and designated as a UNESCO World Heritage Site. In addition to boasting some of Canada’s best slopes for skiing, Banff has a vibrant arts scene with the Banff Centre, Whyte Museum of the Canadian Rockies and many private galleries which attract notable names such as Alec Baldwin, Meg Ryan and Glenn Close to the town.
#8: Park City, Utah 7 Roamer Ct: $12,900,000; Engel & Völkers Park City
Home to both the largest ski resort in North America and the Sundance Film Festival, Park City attracts celebrities such as Will Smith and Michael Jordan, who love the outdoor recreational activities. For those who prefer to skip the slopes, the picturesque town also features a thriving arts and culture scene, world-class fine dining and luxurious retail offerings.
Bromont is known as North America’s largest ski destination for illuminated nighttime skiing and boasts over 141 total trails. Canada’s most recognized business executives, politicians, celebrities and athletes live in the area and enjoy Bromont’s vintage downtown village with quaint shops and restaurants and its breathtaking natural beauty with scenic vistas.
Consistently voted the #1 Ski Resort in Eastern North America by SKI Magazine readers for close to two decades, Tremblant not only features some of the most sought-out slopes in North America, but also a variety of highly acclaimed major events including IRONMAN Mont-Tremblant, 24h Tremblant, Snow Polo, Canadian Alpine Championships and Canadian Snowboard Championships. The winter enclave’s other renowned offerings, including panoramic views of the spectacular Laurentian mountain range, proximity to the beautiful Mont-Tremblant National Park and its diverse recreational offerings, variety of notable restaurants and Circuit Mont-Tremblant have been known to lure in A-listers such as Catherine Zeta Jones and Michael Douglas and professional athletes including Mario Lemieux.
A vibrant resort destination, Lake Placid is world-renowned for hosting the 1932 and 1980 Winter Olympics. Lake Placid resides in the Adirondack Park, a forever wild preserve with quaint villages nestled in the mountains and lakes. The area offers a respite from the city with notable names such as James Burrows, Mike Richter and Andrew lack all calling Lake Placid home to escape the crowds, admire the natural scenery and enjoy the array of winter activities includes ice climbing, Alpine and cross-country skiing, snowshoeing, ice skating and snowmobiling.
With over a dozen resorts featuring slopes perfect for the avid skier or snowboarder to hit, including Donner Lake, Heavenly Valley and Squaw Valley, key players and celebrities alike, from Larry Ellison to Michael Milken, have been known to flock to the snowy escape in the Sierra Nevada. The area features breathtaking natural scenery, with the namesake lake a pinnacle of the region, notable hiking and biking trails, and a vibrant cultural scene with festivals such as Snowglobe and Snowfest.
Known as the nation’s first ski resort destination, Sun Valley was first put on the map in the late 1930s when glamourous stars of the day began to visit its premier ski area, Bald Mountain. Since then celebrities from the likes of Jamie Lee Curtis, Demi Moore and Clint Eastwood have called Sun Valley home for the winter season. Its beautiful natural surroundings, seclusion from the rest of the world and unmatched slopes make Sun Valley the ultimate spot to retreat from the hustle and bustle of daily city life.
Renowned for having some of Colorado’s most sought-after ski slopes, Vail consistently attracts famous figures, such as Michael Bloomberg and Lindsey Vonn, who are drawn to the exclusivity and wider variety of activities than a traditional ski town, such as dance festivals, concerts and the Audi Birds of Prey World Cup. The notable Colorado region also boasts beautiful natural landscapes from the scenic countryside trails to picturesque mountains.
A well-known celebrity retreat, Aspen is a popular ski town with more to offer than just hitting the slopes. Celebrities such as Goldie Hawn, Kevin Costner, Mariah Carey and Antonio Banderas call Aspen home every winter and enjoy exploring the Aspen Art Museum, tasting the latest foodie sensations at the Aspen Food + Wine Festival, dining at the area’s over 60 fine dining establishments, or participating in the area’s many festivals and activities including the X-Games, Winterskol and FIS World Cup.
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"Eliminating or nullifying the tax incentives for homeownership puts home values and middle-class homeowners at risk, and from a cursory examination, this legislation appears to do just that," William E. Brown, president of the National Association of Realtors (NAR), said in a statement.
What's more, home prices — and thus, loan amounts — are much higher in pricey coastal markets like New York City, San Francisco, Boston, Los Angeles, and Washington DC. Millennial populations in these cities are only increasing.
Jerry Howard, the CEO of NAR, estimated that 7 million homes would be excluded from the mortgage-interest deduction, amounting to about a third of the homes in California.
"You're talking about potentially causing housing recessions in some of the biggest markets in the country, and those kinds of recessions tend to have spillovers," Howard said. "We're worried about a national housing recession."
