From the Philly Inquirer:
Usually, Tom Bracken said, he would do cartwheels over a plan to cut corporate taxes.
Instead, this week the president of the New Jersey Chamber of Commerce blasted the Republican tax plan now nearing the finish line, saying it would harm property values in the Garden State and discourage quality workers from moving there.
“It’s going to make it more expensive to live here,” Bracken said on a media call.
He and other critics, including the New Jersey Business and Industry Association — which also said the plan “will negatively impact property values” — worry about the plan’s ripple effects on housing due to proposed limitations on valuable deductions for mortgage interest and state and local taxes. Those changes, critics argue, could also squeeze local governments that rely on local taxes to fund schools and services.
“New Jersey’s going to feel this pretty significantly,” said Dave Jones, a tax and real estate expert at Temple’s Fox School of Business.
Kevin Gillen, an economist at the Lindy Institute at Drexel University, said homeowners in South Jersey would be more affected than those in Pennsylvania. The Jersey Shore, in particular, could take a hit because the property-tax deduction could be eliminated for second homes, and the Shore has some of the most expensive houses in the region.
“I don’t think it will affect homeownership so much as it will affect home prices,” he said. “You’re not willing to pay as much for a home as you would otherwise.”
Democrats and Realtors said alarm bells should still sound in suburbs outside Philadelphia, where home prices and property taxes can also be high.
“If you have a home in a middle- or upper-middle-class area [around] Philadelphia right now, under this GOP tax plan, you’re at risk of seeing a drop in your home value,” said Rep. Brendan Boyle (D., Pa.), whose district is split between Northeast Philadelphia and suburban Montgomery County.
Jamie Ridge, president of the Suburban Realtors Alliance, which represents Realtors from Montgomery, Chester, Bucks, and Delaware Counties, said his members “are extremely concerned.”
“Most of the time when you’re trying to determine what a family can afford, the mortgage interest deduction and state and local property taxes and state and local income taxes all play into that,” Ridge said.