How SALT Deduction Restoration Affects NJ Home Prices
Q: I heard they may roll back the property tax deduction limitation from the last tax bill. Is that true? What will the impact be on New Jersey real estate? Henry, Sayreville, NJ
A: SALT stands for state and local tax. The 2017 tax reform bill capped SALT deductions at $10,000 so rolling back the SALT deduction limits would impact residential real estate in New Jersey particularly in North Jersey where property taxes are higher. In fact, six NJ Counties have property taxes that on average exceed $10,000 per year. Property taxes aside, the pandemic made many suburban locations more appealing to home buyers and if the SALT Deductibility Act is passed it will restore the pre-2017 deduction. If passed, the Act will likely increase demand even more for single family homes in high property tax Counties. The NJ Counties with the highest average property taxes are 3. Union 2. Bergen 2. Essex–demand for homes in these 3 North Jersey Counties will likely increase the most as a result of the restoration. Thanks for your question, Henry. Good luck.
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