Why Trump Tax Plan, Christie Gas Tax Deal Could Lower NJ Home Values
In a report described by Gannett, Moody's warned that the sales tax decrease that Christie used to offset the gas tax increase and the president's tax reform could work to reduce the average value of a home in New Jersey by 7.5 per cent by the end of the year.
According to the report, the new sales tax rate of 6.875 per cent, which dropped from 7 percent on Jan. 1, is projected to bring in $400 million less in revenue for the fiscal year ending June 1 and another $100 million less the fiscal year after.
On the federal side, new rules that allow a maximum $10,000 deduction for both federal and state taxes plus a reduction in corporate taxes will also impact the value of houses.
While the tax changes will leave consumers with more in their paychecks, at least in the short-term, lower housing prices will also have a ripple effect on retail sales because consumers will have less disposable income.