That Big Federal Tax Reform Bill? It Might Cause Your Chicago Home’s Value to Stagnant
Think the tax reform efforts going on in Congress today won’t impact you? Think again. It might hit you financially if you own a single-family home or condominium in Chicago.
Crain’s Chicago Business recently reported on a report released earlier in December by Moody’s Analytics. The report looked at the potential impact that the tax reform bill will have on home values around the country. It measured the gap between what home values would be in 2019 without changes in the current tax structure and what they would be if the reforms are passed.
According to the numbers, home values in Cook County will rise by 5.7 percent less if the tax reforms go through than they would if the tax code remain unchanged.
That’s not great. But Cook, at least, will be hit less hard than other nearby counties. Moody’s reported that home values in Lake County will be 9.6 percent lower in 2019 if the tax changes go through. In McHenry County, that figure is 8.3 percent, while it’s a still-high 7.4 percent in Will County.
The Crain’s story quotes an official with the Chicago Association of REALTORS® who says that home values have been rising more sluggishly in Illinois already than they have been in other major metropolitan areas of the country. With the new tax changes, this official told Crain’s, the growth in home values here will slow by an even greater degree.
The biggest negative from the proposed tax reforms? According to the Moody’s report, that would be the reduced value of tax deductions that homeowners here would be able to claim for mortgage interest deduction and property taxes.
The reduction in property tax deductions could hit Chicago-area homeowners especially hard. Illinois homeowners pay some of the highest property taxes in the nation. If the deduction these owners will get from these taxes will fall, that will simply add some additional sting to those big tax bills.