Thursday, Sep 20th

Last updateThu, 20 Sep 2018 1pm

You are here: Home Content Shout it Out New Tax Code Could Hit Scarsdale Hard
first
  
last
 
 
start
stop
School Lunch Program Debuts to Mixed Reviews

School Lunch Program Debuts to Mixed Reviews

Despite months of planning, collaboration with parents and teachers...

Bronx River Books: Now Open in Scarsdale Village

Bronx River Books: Now Open in Scarsdale Village

Jessica Kaplan and Mark Fowler of Bronx River Books Like many of you...

Police Report: Jewelry Stolen During Sylvan Road Burglary

Police Report: Jewelry Stolen During Sylvan Road Burglary

Burglary: On Sept. 14, a Sylvan Road resident reported her house ha...

first
  
last
 
 
start
stop

New Tax Code Could Hit Scarsdale Hard

homepricesScarsdale residents and Scarsdale home values could both take a big hit when the new tax bill is enacted. At present the differences between the House and Senate versions of the tax bill will be reconciled by a conference committee and then enacted into law, but both versions include provisions that will be costly to many Scarsdale residents.

Both versions would hurt New York residents and especially residents in areas with high property taxes like Scarsdale as they limit the property tax deduction to $10,000 per year and completely eliminate deductions for state and local income taxes (SALT). According to the New York Times, Westchester County taxpayers are among 12 national counties that take the highest SALT deductions, with 47% of residents taking an average deduction of $34,300. However in Scarsdale, where the homeowner of an average house pays about $35,000 in real estate taxes alone, the impact of the loss of this deduction would be far greater.

The two bills differ on the deduction for mortgage interest. The limit for mortgage interest deductions are $500K for the House bill and $1mm for the Senate bill.

Moody's Analytics predicts that the elimination of the SALT deduction will cause housing prices to fall about 10%, as homes will have greater carrying costs per month and be less affordable to prospective buyers. If the House version of the bill is passed and mortgage interest deductions are capped at $500,000 in debt, this could further impact homebuyers and the Scarsdale real estate market.

David Gussman a Scarsdale resident and mortgage professional provided this back-of-the-envelope example of how a typical Scarsdale home buyer stands to fair under the new code:

Assuming a $10K property tax deduction is passed and the mortgage limit is reduced to a maximum size of $500K for deductibility of interest, Gussman determined that a new home buyer making about $500K per year buying a $1.7mm home in Scarsdale and taking a $1mm dollar mortgage could see the after-tax cost of the mortgage payment and property taxes increase by about 20% in comparison to the payment under the current tax code. The after tax cost of the 30-year fixed rate mortgage and property tax payments under the current law is $5,140 per month and after the changes it would be $6,140 per month, for a difference of $1,000 a month.

The impact will be different for different homebuyers depending upon their level of income, particular tax situation and which elements are included in the final version of the tax bill.

David Gussman is a mortgage professional who has managed ~$80B of non-agency mortgage bonds at Fannie Mae and ran product and technology for a company that collected information on every mortgage in America and provided data and analytics to holders of mortgage risk. He currently makes investments in start-up specialty finance companies and advises companies in the real estate/mortgage space. He lives in Scarsdale with his family.

BLOG COMMENTS POWERED BY DISQUS

Good Work

SETTING

Firefighter Sworn-in and Others Honored at SFD Ceremony

Firefighter Sworn-in and Others Honored at SFD Ceremony

Nicholas Konicoff and Fire Chief Seymour One new firefighter was sworn in and nine career firefighters and one volunteer firefighter were ...

Read More

Around Town

SETTING

Ladies Who Lit to Debut at JCC

Ladies Who Lit to Debut at JCC

Edgemont’s Stephanie Risa Balkin, the new director of Arts & Talks programs at the Jewish Community Center of Mid-Westchester, is wor...

Read More

Neighborhood News

SETTING

Bronx River Books: Now Open in Scarsdale Village

Bronx River Books: Now Open in Scarsdale Village

Jessica Kaplan and Mark Fowler of Bronx River Books Like many of you, we were so excited to find that Scarsdale’s new independent bookstor...

Read More

On Our Minds

SETTING

Seasons Kosher Grocery Files for Bankruptcy But is Still Expected to Open a Larger Store at the Golden Horseshoe in October

Seasons Kosher Grocery Files for Bankruptcy But is Still Expected to Open a Larger Store at the Golden Horseshoe in October

Despite filing for Chapter 11, Seasons Supermarket is still expected to open at the Golden Horseshoe Shopping Center in October. The shop...

Read More

On Our Radar

SETTING

Hamilton Author Ron Chernow Coming to a Town Near You

Hamilton Author Ron Chernow Coming to a Town Near You

With the construction at the Scarsdale Library, many Scarsdale residents are heading over to the White Plains Public Library to access re...

Read More

Parenting

SETTING

Skolnik Promoted to Director of Content at NYMetroParents

Skolnik Promoted to Director of Content at NYMetroParents

NYMetroParents, the parenting division of Davler Media Group (DMG) encompassing eight print magazines including Big Apple Parent and the ...

Read More

Village Voices

SETTING

Gas Leak Shuts Down Post Road

Gas Leak Shuts Down Post Road

At 9:30 am on Monday September 17, workers who were repaving the Post Road in Scarsdale, struck a gas line causing leaks to homes on Evon...

Read More

Shout it Out

SETTING

Board of Trustees Report Repaving, New Gas Lines and New Stores in the Village

Board of Trustees Report Repaving, New Gas Lines and New Stores in the Village

This week’s Scarsdale Board of Trustees’ meeting was largely positive and brief, in contrast to the miserable weather that has taken hold...

Read More

School News

SETTING

SHS Class of ’19 Gets Their Chance to Chalk

SHS Class of ’19 Gets Their Chance to Chalk

The SHS Class of ’19 particpated in one of the rites of being a senior. On Friday September 14, Scarsdale High School seniors crowded aro...

Read More

Schools

SETTING

School Lunch Program Debuts to Mixed Reviews

School Lunch Program Debuts to Mixed Reviews

Despite months of planning, collaboration with parents and teachers and the best of intentions, the Scarsdale School administration found...

Read More

The Goods

SETTING

Scarsdalians Steal the Show at the 2018 Emmy Awards

Scarsdalians Steal the Show at the 2018 Emmy Awards

Phones all over Scarsdale lit up at 9:33 pm on Monday night 9-17, when a former resident became the surprise star of the Emmy Awards show...

Read More

Real Estate

SETTING

A Promising Start to the Fall Market

A Promising Start to the Fall Market

Sales:
21 Windmill Lane
Colonial designed and built by Scarsdale's most prominent builder with six bedrooms, 5.5 baths 6190 square feet fee...

Read More

Today's News

SETTING

Police Report: Jewelry Stolen During Sylvan Road Burglary

Police Report: Jewelry Stolen During Sylvan Road Burglary

Burglary: On Sept. 14, a Sylvan Road resident reported her house had been burglarized sometime between 7 p.m. and 10 p.m. The perpetrator...

Read More

Arts and Entertainment

SETTING

Create Culinary Memories At Donjito Tacos And Tapas

Create Culinary Memories At Donjito Tacos And Tapas

As new restaurants pop up frequently in Mamaroneck, I seem to be visiting this diverse community frequently. Most recently, there was Sof...

Read More

People

SETTING

Scarsdale Edgemont Family Counseling Service Receives National Accreditation

Scarsdale Edgemont Family Counseling Service Receives National Accreditation

Scarsdale Edgemont Family Counseling Service (SFCS) announced today that it has received national accreditation as a provider of professi...

Read More

first
  
last
 
 
start
stop

Programs for Scarsdale Kids