Hownership has long been a key component of the American dream, helped along by the fact that it offers some hefty income tax benefits. But the Trump administration and Republicans’ new tax plan will likely result in lower home ownership levels, with more people opting to rent rather than purchase a home.
The tax plan includes significant individual income tax system reforms, including the doubling of the standard tax deduction and the elimination of most itemized deductions, except those for mortgage interest and charitable contributions.
Given the increased standard deduction ($12,000 for single and $24,000 for married taxpayers), many more taxpayers will forgo itemizing and take the standard deduction. Based on an analysis of an earlier House Republican tax reform plan, the Tax Policy Centerestimated that 84% of current itemizers would take the standard deduction if it were doubled. Even more taxpayers will take the standard deduction under the recent Trump proposal due to the elimination of state and local tax itemized deduction.