Updated: Illinois REALTOR® takes fight over tax reform to Capitol Hill today

 

REALTOR® Mike Drews meets with U.S. Rep. Randy Hultgren in Washington, D.C., to discuss tax reform proposals which could hurt Illinois property owners.

Illinois REALTORS® past president Mike Drews is in Washington, D.C., today to press the case for responsible tax reform.

Drews is visiting the Hill as part of an effort to make sure Illinois lawmakers know that the current House version of a tax code overhaul would unfairly hurt property owners in Illinois by eliminating tax deductions and ultimately lowering home prices by as much as 10 percent.

Drews is a Federal Political Coordinator for U.S. Rep. Randy Hultgren. FPC’s, as they are called, serve as a valuable conduit for information between REALTORS® and federal officials.

Drews said Hultgren was interested in the data REALTORS® provided. “We gave him a lot of information,” Drews said of the Tuesday morning meeting.

The visit is part of a nationwide push on the part of REALTORS® to make sure the message gets through to the House members who could vote later this week on a package of reforms.

Nearly 30 percent of Illinois REALTORS® have responded to a Call for Action urging lawmakers to proceed with care when reforming the tax code. (Take part here).

REALTORS® are not against tax reform, but are concerned about protecting the Mortgage Interest Deduction and deductions for state and local taxes. As drafted, the proposal now would:

  • Increase the standard deduction on  tax returns, which could put home ownership incentives beyond the reach of many families.
  • Limit capital gains from the sale of a primary residence. Homeowners would have to live in a property five of eight years, rather than the current two of five years to realize this benefit.
  • Important deductions disappear, most notably the state and local tax deduction, which would unfairly hit a high-tax state such as Illinois. The loss of deductions ranging from interest on student loans to medical expenses to even moving expenses further chips away at home ownership.

 

 

 

Two REALTORS® doing double-duty in DC

Suvarnamani

Silvano

Illinois REALTORS® Vicky Silvano and Nancy Suvarnamani are asking legislators on Capitol Hill to support the rights of property owners and real estate professionals this week on behalf of the National Association of REALTORS® (NAR) and Asian Real Estate Association of America (AREAA).

They are in Washington, D.C., during the NAR Midyear Legislative Meetings & Expo.

 

While NAR is working hard on the home mortgage interest deduction, the 1031 exchange, flood insurance and government sponsored enterprise (GSE) reform issues, AREAA is on the Hill discussing student loan impacts on mortgage lending, language barriers, reform for the uniform loan application and credit scoring. Together, these two organizations are carrying the message that homeownership and access to capital and cultural barriers to homeownership are both important issues that members of Congress need to be aware of as they make decisions on matters of policy.

U.S. Rep. Judy Chu of California’s 27th District was a speaker at the AREAA Policy Town Hall and stated that “the real estate industry is so important and a favorite for her to meet with since they are most in tune with their communities.” Chu will see the first-hand impact of the collective efforts of both groups.

In some cases, Suvarnamani and Silvano are facilitating conversations that need to take place on these important issues. Suvarnamani, the NAR Federal Political Coordinator to U.S. Sen. Tammy Duckworth of Illinois, is visiting the senator to discuss the AREAA issues and then participating in the Illinois REALTORS® town hall meeting for Duckworth and U.S. Senator Dick Durbin of Illinois.

Why homeowners, REALTORS® should be concerned about proposed federal tax overhaul

Source: Bigstock

The Trump administration released on Wednesday its initial sketch of what tax reform might look like.

Two specific areas to pay attention to as the debate develops would be the Mortgage Interest Deduction’s continued viability as a way to incentivize homeownership and a provision that would eliminate state and local tax deductions.

  • According to the Wall Street Journalthe tax package as outlined by the administration on Wednesday, would essentially double the standard deduction to about $24,000.

That means itemizing deductions including the Mortgage Interest Deduction would be less enticing or useful for those filing. That’s an issue since having the MID at full impact is an incentive to get people to buy homes. And homeownership, in addition to being economic bedrock, also serves to stabilize communities and gives families a shot at wealth creation.

By one measure, the average itemized deduction is about $26,000, so it’s not hard to see why doubling the standard deduction to $24,000 could make itemizing obsolete in many cases.

  • Also troubling is a move to eliminate local and state tax deductions.

Illinois reportedly has the highest property taxes in the state, and with an as-yet unsettled budget situation, it’s possible these taxes might increase over time. If the deduction for state and local taxes vaporizes, that means Illinois taxpayers will take a greater hit than states with lower taxes.

Illinois has a 3.75 individual state income tax rate, having decreased from 5 percent a few years ago. Neighboring Indiana has a 3.33 percent tax rate.

According to a CoreLogic study in 2016 the state had a 2.67 percent median property tax rate, versus a 1.31 percent median average for the U.S. as a whole.

Illinois REALTORS® President Doug Carpenter noted that for years REALTORS® have been urged to be vigilant about protecting the Mortgage Interest Deduction. Now is the time for the association’s 44,000-plus members to get involved in making sure policymakers understand how watering down the MID could have serious economic effects.

“As REALTORS®, we see daily the worth that this policy has had for millions of Illinois families who invest in their communities through homeownership,” Carpenter said. “Eroding the value of the MID is bad policy, and won’t serve the best interests of consumers. We should promote tax polices which encourage homeownership rather than make it less attractive.”

NAR President Bill Brown called the proposal is a “non-starter” for the real estate industry and homeowners. (His full statement is here.)

“Major reforms are needed to lower tax rates and simplify the tax code, but that shouldn’t come at the expense of current and prospective homeowners, ” he said.

It’s important to note that this is just the first step in the tax reform debate which is expected to last many months.

Illinois REALTORS® have a chance in less than a month as part of Capitol Hill visits during the REALTOR® Midyear Legislative Meetings and Trade Expo to tell lawmakers in Washington, D.C., to maintain the the MID’s impact.

Government Action Effects REALTOR® Economics

The REALTOR® Association of Southwestern Illinois recently hosted their second annual ‘Economic Forecast’ breakfast. This event is designed to give members an insider’s peek at what is in store for the next year and the impact on the real estate market. This year was particularly insightful as the guest speaker was Dr. Lawrence Yun, Chief Economist for the National Association of REALTORS®.

Dr. Yun provided members national and regional economic data such as job growth, past and recent home sales, as well as trends in consumer confidence that are vital to increasing home sales. Citing a lagging GDP, low consumer confidence and slow job growth, Dr. Yun stated the economic recovery will be slow and will need help to fully get there.

What dovernment does...As a Local Government Affairs Director, I am always advocating the actual value of the Illinois Association of REALTORS®’ role in effectively advocating for or against legislation that impacts our industry. Sometimes it is difficult to get the message across that what government does directly impacts the demand for and our ability to sell properties.

I was excited when an economist like Dr. Yun made the point to discuss the impacts changing the Qualified Residential Mortgage’s (QRM) 20% down would have inhibiting first-time homebuyers, how taking away the Mortgage Interest Deduction (MID) makes owning less financially advantageous, and how not guaranteeing access to a 30-year mortgage would affect an already struggling real estate market.

After the breakfast, several members commented to me on the connection Dr. Yun made between government affairs and the economics of real estate. It was a new level of interest from some members and it reaffirmed the belief other members already had in the role government affairs plays in the industry and why it is important the Illinois Association of REALTORS® is always there advocating on behalf of Illinois REALTORS®.

Share this post with your REALTOR® constituents and learn more about the issues important to Illinois REALTORS® at www.IARActionCenter.org >

Kyle Anderson, Local Government Affairs Director, represents the REALTOR® Association of Southwestern Illinois, the Greater Gateway Association of REALTORS®, and the Egyptian Board of REALTORS®.

Bus tour prize winner says “homeownership matters”

Although it was a typical March day in Chicago with blustery Lake Michigan winds, the National Association of REALTORS® (NAR) Home Ownership Matters Bus Tour got started at Navy Pier this past Saturday with the opening of the Chicago Flower and Garden Show.

NAR President-Elect Moe Veissi along with Chicago Association President Mabel Guzman and myself, President-Elect of the Illinois Association of REALTORS®, were there to greet consumers.

We were fortunate to have the tour start in Chicago. The next stops will be in St. Louis and on to Denver, Colorado, finishing up in Portland, Oregon.

At the Navy Pier event, consumers registered to win three raffles: one at 11 a.m for a $500 Lowe’s gift card, another at noon for a $1,000 Lowe’s gift card and at 1 p.m. for a $2,500 Lowe’s gift card. It was great to talk to consumers and ask how they feel about homeownership. There was a resounding voice from them that homeownership is important and we should not eliminate the mortgage interest deduction.

The winner of the $1,000 Lowe’s gift card  said it best: “I grew up one of seven children and my parents always rented. The first thing I did when I got married was buy a home.”

Chicago Aldermen Brendan Reilly (42nd Ward) and Robert Fioretti (2nd Ward) stopped by to lend their support for continuing the mortgage interest deduction.