How Trump’s new tax law affects homeowners at every income level from $83,000 to $336,000 a year

Homeowners in expensive coastal cities will see the biggest loss of tax deductions.

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Homeowners in expensive coastal cities will see the biggest loss of tax deductions.
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Getty/Chip Somodevilla

  • President Donald Trump signed the Republican tax bill into law in December 2017.
  • The new tax law changes the mortgage interest and property tax deduction, potentially making homeownership less attractive in the long run.
  • Homeowners in expensive coastal cities will likely see the biggest loss of tax deductions, according to one housing economist’s projections.

President Donald Trump signed the Republican tax bill into law at the end of December.

The new tax law makes sweeping changes to the tax code for businesses and, on average, American taxpayers. It changes a few longstanding tax benefits for homeowners, too.

Under the new law, the deduction for state and local property taxes is capped at $10,000. Plus, homeowners who deduct mortgage interest are limited to the amount they pay on $750,000 worth of debt, down from $1 million. On the flip side, the standard deduction has doubled, likely leading fewer homeowners to itemize their taxes.

These changes may weaken incentives for homeownership, especially in expensive coastal markets in California and the Northeast where home prices are high and residents pay state taxes on income as well as property. Homeowners in these markets will see the biggest change in their housing-related tax deductions.

“The impact of the changes is felt disproportionately in left-leaning parts of the country,” writes Chris Salviati, a housing economist at Apartment List, in a new report. “There are 15 states in which the median homeowner will receive at least $100 less in housing tax deductions under the new plan – President Trump carried none of these states in the 2016 election.”

Apartment List analyzed the affect of Trump’s new tax law on homeowners with home values below, at, and above the median in the largest metros in the US. They estimated the overall tax bill for a married couple filing jointly with a dependent child under the previous tax code and the new tax code.

In much of the US, only owners of the most expensive homes in a local market will see a loss in housing tax deductions. But on the California coast and along the Northeastern seaboard, most homeowners – even those with homes valued below the median – will lose deductions they had pre-tax reform.

For homeowners of a median-priced house in the Bay Area, the loss of mortgage interest and property tax deductions could total more than $100,000 over the course of a 30-year mortgage, according to Salviati’s calculations. The estimation does not factor in projected home price changes over that time period, however.

Below, we’ve listed the affect of Trump’s tax law on homeowners of the highest-value homes – the 75th percentile – in 27 of the largest US metros, ranked by home value, using Salviati’s calculations.

For each city, we’ve also provided estimated household income, tax deductions pre- and post-tax reform, and the total loss over a 30-year mortgage, according to the Apartment List report. We excluded places with a population below 1 million and anywhere the difference in housing tax deductions was unchanged.


Richmond: $332,400 home value

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f11photo/Shutterstock

Estimated income: $83,100

2017 housing tax deduction: $800

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $5,000


Las Vegas: $336,600 home value

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iStock / Donyanedomam

Estimated income: $84,200

2017 housing tax deduction: $500

Deduction under Trump’s new tax law: $0


Nashville: $338,300 home value

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f11photo/Shutterstock

Estimated income: $84,600

2017 housing tax deduction: $900

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $4,000


Virginia Beach: $343,400 home value

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Sherry V Smith/Shutterstock

Estimated income: $84,900

2017 housing tax deduction: $900

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $8,000


Minneapolis: $347,800 home value

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photo.ua/Shutterstock

Estimated income: $87,000

2017 housing tax deduction: $1,400

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $15,000


Phoenix: $349,000 home value

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Shutterstock

Estimated income: $87,300

2017 housing tax deduction: $800

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $5,000


Hartford: $350,100 home value

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f11photo/Shutterstock

Estimated income: $87,500

2017 housing tax deduction: $1,500

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $24,000


Raleigh: $356,600 home value

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Sean Pavone/Shutterstock

Estimated income: $89,200

2017 housing tax deduction: $1,200

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $12,000


Chicago: $357,300 home value

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Shutterstock

Estimated income: $89,300

2017 housing tax deduction: $1,500

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $20,000


Philadelphia: $367,700 home value

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Shutterstock

Estimated income: $91,900

2017 housing tax deduction: $1,300

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $16,000


Providence: $373,000 home value

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Tupungato/Shutterstock

Estimated income: $93,300

2017 housing tax deduction: $1,500

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $21,000


Salt Lake City: $383,600 home value

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Aqua Mechanical/Flickr

Estimated income: $95,900

2017 housing tax deduction: $1,200

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $11,000


Miami: $394,800 home value

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pisaphotography/Shutterstock

Estimated income: $98,700

2017 housing tax deduction: $1,000

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $6,000


Austin: $399,300 home value

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RoschetzkyIstockPhoto/iStock

Estimated income: $99,800

2017 housing tax deduction: $1,500

Deduction under Trump’s new tax law: $0

Total loss over 30-year mortgage: $15,000


Baltimore: $438,000 home value

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Jon Bilous/Shutterstock

Estimated income: $109,500

2017 housing tax deduction: $1,800

Deduction under Trump’s new tax law: $100

Total loss over 30-year mortgage: $25,000


Riverside: $439,100 home value

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Shutterstock/Jon Bilous

Estimated income: $439,100

2017 housing tax deduction: $2,100

Deduction under Trump’s new tax law: $700

Total loss over 30-year mortgage: $27,000


Portland: $473,200 home value

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Jon Bilous/Shutterstock

Estimated income: $118,300

2017 housing tax deduction: $2,600

Deduction under Trump’s new tax law: $1,000

Total loss over 30-year mortgage: $32,000


Denver: $480,600 home value

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Andrew Zarivny/Shutterstock

Estimated income: $120,200

2017 housing tax deduction: $3,300

Deduction under Trump’s new tax law: $500

Total loss over 30-year mortgage: $21,000


Sacramento: $500,600 home value

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Andrew Zarivny/Shutterstock

Estimated income: $125,200

2017 housing tax deduction: $4,600

Deduction under Trump’s new tax law: $1,200

Total loss over 30-year mortgage: $42,000


Seattle: $616,700 home value

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Rob van Esch/Shutterstock

Estimated income: $154,200

2017 housing tax deduction: $4,300

Deduction under Trump’s new tax law: $1,300

Total loss over 30-year mortgage: $41,000


Boston: $619,500 home value

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Jorge Salcedo/Shutterstock

Estimated income: $154,900

2017 housing tax deduction: $6,200

Deduction under Trump’s new tax law: $2,300

Total loss over 30-year mortgage: $84,000


Washington DC: $635,100 home value

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Orhan Cam/Shutterstock

Estimated income: $158,000

2017 housing tax deduction: $5,800

Deduction under Trump’s new tax law: $2,400

Total loss over 30-year mortgage: $78,000


New York: $655,600 home value

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Stig Ottesen/Unsplash

Estimated income: $163,900

2017 housing tax deduction: $7,400

Deduction under Trump’s new tax law: $2,600

Total loss over 30-year mortgage: $115,000


San Diego: $736,900 home value

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Shutterstock

Estimated income: $184,200

2017 housing tax deduction: $7,700

Deduction under Trump’s new tax law: $3,300

Total loss over 30-year mortgage: $110,000


Los Angeles: $827,900 home value

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TierneyMJ/Shutterstock

Estimated income: $207,000

2017 housing tax deduction: $8,600

Deduction under Trump’s new tax law: $4,000

Total loss over 30-year mortgage: $114,000


San Francisco: $1,140,700 home value

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canadastock/Shutterstock

Estimated income: $285,200

2017 housing tax deduction: $13,300

Deduction under Trump’s new tax law: $5,300

Total loss over 30-year mortgage: $145,000


San Jose: $1,343,600 home value

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Uladzik Kryhin/Shutterstock

Estimated income: $335,900

2017 housing tax deduction: $17,500

Deduction under Trump’s new tax law: $4,400

Total loss over 30-year mortgage: $165,000