By Amy Gershon March 11, 2018 09:51:03Real estate companies have long fought tax hikes and other restrictions on home purchases.
But a new tax proposal that would impose a one-time surcharge on housing transactions, as well as on all property transfers to foreign buyers, would put more money in the pockets of homeowners.
While the proposal is a major step toward easing housing affordability and improving the economy, it’s not without its critics.
The Tax Cuts and Jobs Act, known colloquially as Trumpcare, would impose surcharges on all housing transactions and other transactions that could result in tax liabilities.
As of now, the bill contains no specific provisions to tax the transaction costs of foreign buyers.
It also does not apply to real estate transfers to foreigners, which would still require the payment of taxes to the U.S. Treasury.
Currently, the surcharges are capped at a $200,000 purchase price.
However, Trumpcare would also impose a $50,000 tax on every foreign transaction, which is a flat rate of 1.75 percent.
These surcharges could potentially be offset by higher-value foreign investments, according to the Tax Policy Center.
A surcharge of $50 a transaction is already a tax on foreign buyers in the U-S.
But that rate is set to rise by more than $1,000 for every $100,000 that a foreign buyer purchases in the next five years, according the Center.
A foreign buyer who sells in the first 10 years of a real estate purchase would pay a 25 percent tax on the purchase price, according to a Center analysis.
“The U.K. already imposed a surcharge when buying a home.
But because of the Trumpcare surcharge, the U