Triangle Property Lines: Are You in Danger of Losing Your Home Equity?

Are You in Danger of Losing Your Home Equity?

New Tax Code Changes being discussed in North Carolina will have serious repercussions for homeowners

I’ve heard the word “tax” defined as the action of taking the money that people have earned and giving it to institutions that may not have earned it. Are you aware of what’s currently going on with regard to potential tax code changes here in North Carolina? Here’s a brief overview.

In 2012, the state of North Carolina collected $10.27 billion in personal income taxes; over $1 billion from corporate income taxes, and over $5 billion from sales and use taxes. New plans being discussed by elected leaders would either reduce or remove personal and income taxes. In place of the personal and corporate income tax could be a series of new taxes to make up the difference.

Currently there are four bills filed in the NC Senate, with more likely to come.

Senate Bill 677 – Reduces and reforms the corporate income tax.
Senate Bill 669 – Scales down personal income taxes over a three year period.
Senate Bill 394 – A major overhaul of the state’s tax code. This bill includes eliminating the mortgage interest deduction, along with the property tax deduction.
Senate Bill 363 – Repeals most state and local privilege taxes and replaces them with a simplified business privilege tax.

Tax Reform and the Mortgage Interest Deduction (MID).

The MID saves the average homeowner thousands of dollars—each year—on their income tax return. More than 60% of the families who claim the mortgage interest deduction have household incomes between $60,000 and $200,000, according to the NATIONAL ASSOCIATION OF REALTORS®. Homeowners already pay 80% to 90% of the income tax in our country, and among those who claim the mortgage interest deduction, almost two-thirds are middle-income earners.

Tax Reform and Sale of Property— A Suggested “Transfer Tax” or “Home Tax”

Various tax reform plans have suggested imposing an additional “transfer-tax” on the sale of land or a home, using the term “conveyance fee”. But it’s really just a home tax. This is the same tax that voters and homeowners fought hard against in 2007 and was defeated 24 times on 24 local ballots with an average 78% margin against the tax. It’s the same tax that would strip people of their hard-earned equity: the equity many people plan to use for their children’s education or for their own retirement.

Tax Reform and Services: What’s it mean for homeowners and property owners?

In order for the state to lower or eliminate the personal and corporate income tax, some of the proposals include imposing a sales tax on services. An 8 percent tax on services would have a detrimental impact on homeowners trying to sell their homes. Imagine an 8% tax on the services provided by an attorney; an 8% tax on the appraiser; an 8 % tax on the home inspector; and an 8% tax on the services for using a REALTOR®. It would add thousands to the cost of a typical home.

Yes, you can make a difference! Let your representative know how you feel.
Here’s how to find out who they are & how to contact them:

How to Contact My Senator

How to Contact My Congressman

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