Luxury, space, and privacy in Rumson! 124 Bingham Ave. boasts 5500+ square feet, 5 en suite bedrooms, 3 family rooms, gourmet kitchen and much more!
Call Jessica Hall Hickey at 917-453-9049 for more information.
All things point to a more favorable environment for very high-end homeowners.
In the House’s proposed tax plan, it’s the capital gains that may make the biggest difference, rather than the MID. For the ultra-luxury market, the $10 million-plus range, the tax plan is a boon.
Although much of the furor over the proposed tax reform plan from the Republican-led House has focused on the reduction to the cap for the mortgage interest tax deduction, it is the proposed changes in capital gains that may make the biggest difference.
In fact, Mark Zandi, chief economist at Moody’s Analytics, told The Chicago Tribune that the tax changes could reduce prices in the most expensive markets by 10 percent. Price escalation has slowed over the past couple of years, and CoreLogic has reported that over one-third of the top 100 markets are overvalued, so this may be part of a larger correction.
Boon or curse?
For the ultra-luxury market (the $10 million and up range), the tax plan is a boon. Buyers who can afford that price point are usually business owners or those with inherited wealth. They will likely benefit from the low corporate tax rate and pass-through rates from S Corps and LLCs. The tax plan from the House also follows through on President Trump’s stated goal to eliminate the estate tax as much as possible. The bill doubles the basic exclusion amount for gift and estate taxes and repeals the estate tax in six years. Down the road, this could have a phenomenal impact on the distribution of wealth, further fanning demand for homes in excess of $10 million.
For the immediate future, it’s the capital gains changes that will have the greatest reverberations. Currently, homeowners are allowed to exclude up to $250,000 in capital gains ($500,000 for married couples) when they sell a primary residence.
The existing rule states that owners must have lived in the home for two of the last five years of ownership. The new plan would require that the homeowner must have lived in the home for at least five out of the past eight years.
The changes also allow one sale every five years instead of every two. The exclusion is also diminished by a dollar for every dollar a joint taxpayer’s adjusted gross income exceeds $500,000. The markets that will be most strongly impacted are those in the Northeast and on the West Coast. In some of the areas, where luxury properties have already lingered on the market, many sellers may opt not to sell after all.
In markets such as San Francisco, the combination of high prices and low affordability have already taken a tremendous toll; the proposed tax plan may create added stress on the region. In places like New York where property taxes are high, the part of the plan that would cap the property tax deduction at $10,000 would also have a big impact.
Jerry Howard, CEO of the National Association of Home Builders, told USA Today that “3.7 million households paid more than $10,000 in property taxes in 2016.”
What the tax bill will do is provide new constraints and considerations as people begin to contemplate making their next moves.
What we may see in the short term is a bit of a seller stampede as sellers try to sell now and maximize their profits. For example, if buyers purchased a home for $1 million and then had a $1.25 million sale, they could see nearly half of their profit out the door in taxes and fees.
In the long term, the proposed changes could also affect how owners feel about commissions. The middle of the market is where taxpayers will get squeezed the most, and that is also where agents make the biggest chunk of their earnings. With a smaller piece of the profits from each sale going back to the seller, every percentage point will be up for debate.
It’s too soon to know whether the proposed tax reform will successfully make it through the legislative process, but at this point, all things point to a more favorable environment for the very high-end and uncertain times for most American homeowners and the real estate community.
Christopher Rinn will lead the state Department of Health during the final two months of Gov. Chris Christie‘s tenure.
“I’m honored to be appointed Acting Health Commissioner, and I look forward to continuing the progress the Department has made in key public health priorities,” Rinn said in a statement.”
Classic Colonial home designed by Princeton architect William Magill Thompson located on 2.7 park-like acres once part of a grand Rumson estate. A circular driveway leads to this 5/6-bedroom steel-beam constructed home which has an ideal layout offering multiple options for today’s buyer.
Call Nicholas McCabe at 646-373-1307 for more information or to see this stunning home!
OCTOBER, 2017 – We’ve been busy! As members of the global Board of Regents of Luxury Real Estate we were in Toronto earlier this month as part of their annual international conference where Resources Real Estate was nominated for 5 marketing awards and honored for our company’s special culture & agents. While there, Tom was a featured panelist (Carolynn has been a past conference panelist) and we deepened our relationships with brokers from around the world. This esteemed gathering is a critically important source for new trends and business practices in our industry, as well as referrals, and their acknowledgment of our achievements is greatly valued.
The following week Resources Real Estate was in Palm Desert, CA, to be honored as part of the Inc. 5000 – the fastest-growing private companies in America. Having now been named to Inc. Magazine’s list for the 2nd year in a row is a powerful independent confirmation of our sales success on a national level. We are one of only two NJ real estate firms to be honored.
Closer to home, we have been awarded NJBiz250, presented to the top 250 private businesses in the state of New Jersey because of outstanding growth and sales.
And to share some of this red carpet love with our sales team, later this month, we will be rewarding our top agents with a luxury vacation at the Breakers Hotel in Palm Beach, FL, in recognition of their having received the NJ Realtors Circle of Excellence Sales Award.
Frequent flyer miles & trophies aside, all of this celebration is due to our sales growth & superior marketing efforts which resulted this quarter in a YTD unit sales increase of 21% over last year… significantly higher than the Monmouth County average of 12%.
We are proud of our progress and of our exceptional sales team & staff and are pleased to serve the residents of Monmouth County with our sales & marketing expertise. Please let us know if you have any questions about the market in general, home values, or other real estate concerns.