Trump Tax Scheme Devastating for East Bay Homeowners, Says Report Requested by Swalwell
WASHINGTON, DC – Homeowners in California’s 15th Congressional District will suffer from the new tax provisions signed into law by President Donald Trump, according to a report from the House Committee on Oversight and Government Reform requested by Rep. Eric Swalwell (CA-15).
“Tens of thousands of 15th District homeowners potentially face tax increases come April 2019. These middle-class homeowners will be stuck paying for the huge tax windfalls Trump gave to the super rich and big corporations,” Swalwell said. “This is one of the many reasons I voted against this terrible scam. It’s already too expensive to live in the Bay Area for most aspiring homeowners; the Trump tax plan has put home ownership further out of reach.”
Homes are often the largest source of wealth for American families, and homeowners generally build equity with each mortgage payment they make. Since Congress enacted a federal income tax more than a century ago, homeowners have been able to deduct interest on their home loans, as well as on property taxes on their homes.
The report, prepared by the Oversight and Government Reform Committee’s Democratic staff, examined the impact of the “Tax Cuts and Job Act” that President Trump signed into law last December.
The new law prohibits homeowners from deducting interest on home equity loans if they use those funds for unexpected medical emergencies, to pay for college education, or for any purpose other than home improvement; this retroactive provision applies even to future interest payments on loans taken out by homeowners in the past. Homeowners also are no longer allowed to deduct property taxes on their homes to the extent that state and local taxes, including property taxes, are more than $10,000.
The report found:
- None of the approximately 155,000 homeowners currently living in California’s 15th District will be allowed to claim deductions for interest on home equity loans they use for any purposes other than home improvement.
- Starting in 2018, about 28,000 homeowners in California’s 15th District with existing home equity loans will not be allowed to claim full home equity interest deductions as they did in the past.
- Although 137,000 homeowners in California’s 15th District used to be able to deduct their full property taxes, about 53,000 no longer will be allowed to do so.
Experts say the report confirms their fears about the Trump tax law.
“The tax change will hurt many struggling homeowners who rely on the tax deduction as part of making ends meet,” said Maeve Elise Brown, Executive Director of Housing and Economic Rights Advocates (HERA), an Oakland-based nonprofit helping Californians build a sound financial future, free of discrimination and economic abuses, in all aspects of household financial concerns. “The change will hamper the ability of homeowners to utilize the family home as a resource to address emergency financial needs.”
Click here to read the report in its entirety.