Mansion Global analyzed how the most recent U.S. tax bill has affected luxury home markets over the year since it took effect.
The Tax Cuts and Jobs Act of 2017, which has been effective since Jan. 1, 2018, limited the state and local income tax (SALT) deductions to $10,000 for those making over $500,000. This will affect luxury property owners in states and cities with high income taxes, such as Manhattan, where the average tax filer deducted $25,627 in SALT from their federal tax bill in 2016.
Over the past year, markets with low income tax, such as coastal Florida, have grown to dominate the list of fastest-growing luxury markets. Sales of homes over one million dollars have risen more than 20 percent since last year in six Florida counties.
Other luxury markets riding high with help from the tax overhaul include Tarrant County, Texas, north of Dallas, where million-dollar-plus sales skyrocketed 47.2% in 2018, according to the latest data from Realtor. Luxury homeowners in Snohomish, Washington—which also boasts no state income tax—have seen prices rise 12.3% in the past year. Realtor defines luxury as the top 5% of sales.
