Tax Reform and Homeowners

Lets talk about taxes.  This is one of the most asked about topics I have gotten in the past few months.  The large tax reform bill will directly effect homeowners.  As of yesterday afternoon the Senate budget committee has voted to send their version of the tax bill to the Senate floor later this week for a vote.  The House version of the bill passed last week.
The tax bill proposes big changes to the the ability for homeowners to deduct real estate taxes and decreases the amount of the mortgage interest deduction.  The Senate bill eliminates the SALT (State and Local Taxes) deduction all together, while the House bill caps this at $10,000.  The Senate bill will continue to allow taxpayers to deduct mortgage debt up to $1 million, while the House version caps it at $500,000.
Both bills also aim to change the definition of capital gains for the purpose of selling a primary residence.  The current law requires a homeowner to live in the house for 2 out of the last 5 years to qualify for the exemption.  Both the House and Senate bills increase this to 5 out of the list 8 years.
This is a moving and changing document.  Republican legislators are aiming to have the bill completed and passed by the end of the year.  The articles below give a great layout of the additional differences between the two bills and how they differ in dollars to you.

Portland Landlords to Pay Relocation Costs for No Cause Evictions

Last year city council incumbent Steve Novice was unseated by Portland bookstore owner, Chloe Eudaly.  The change was a surprise especially after low polling numbers in the primary election.  Chloe Eudaly is a long time Portland renter and ran on a platform of protecting tenant’s rights.

In her first month as city commissioner a rule (spearheaded by Eudaly) was voted on February 2nd  and passed unanimously by city council.  The rule requires landlords to pay for tenant’s relocation costs for no cause evictions and rent increases over 10%.  The relocation costs range from $2,900 for a studio to $4,500 for a two bedrooms apartment.  This rule is a emergency response to the housing crisis and will be in effect immediately until October of 2017.  Commissioners noted that the rule is not perfect and Amanda Fritz was quoted saying there will be unintended consequences that are yet to be seen.

The commissioners heard testimony for 5 hours on Thursday from both landlords, tenants and tenant right activists.  In response the Multifamily Northwest will most likely file a lawsuit to battle the 10% cap as Oregon has a ban on rent control.  There are a number of exemptions, including landlords who rent only one dwelling in Portland.