How the reduction of itemized deductions may impact income tax and refunds for those living in the state of Delaware.
The full impact of recent changes to income tax deductions is starting to become apparent, even in Delaware where traditionally residents enjoy lower state taxes. I spoke to a friend the other night, before our pickleball game, who for the first time was not able to itemize deductions. This tax change made a noticeable difference in the overall taxes he paid. He wondered if the loss of itemized deductions would make people less interested in owning a home.
Will more people choose to rent?
That’s a good question. Will more people decide that renting an apartment is a better option than purchasing a home, especially our clients—retiring Baby Boomers?
Between 2015 and 2018, between 46% and 49% of Active Adults Realty Buyer clients purchased a new construction home instead of an existing home or resale.
What is the main reason they choose a new build rather than a “used” home, as new home salespeople call them? With a new build, the homeowner gets to choose exactly the options and upgrades they want. Our clients have worked hard their whole lives to earn a comfortable retirement in the home of their dreams. Would a rental apartment or even a lovely rental home fulfill this dream?
Personalize your home
Even when our clients find an existing home which comes close to their ideal, they know that they can change the flooring or replace a kitchen counter with granite or quartz. They always have the option of personalizing their home. But with a rental, the options are limited to décor and perhaps a coat of fresh paint. Will you purchase new stainless appliances when you are renting? Redo the kitchen? Add a screened porch?
So, no, I do not believe home ownership will diminish with our clients. In fact, I think our market in Delaware will do nothing but grow. As I said in this blog post about the SALT limitation, more people approaching retirement in the high tax states like New Jersey, New York, and Connecticut will make plans to relocate. Delaware will look more attractive than ever.
Lower taxes alone are not enough
But, as I also remind people, taxes alone are not enough of a reason to uproot your life and move to a new location. That’s a negative reason and negativity doesn’t breed happiness. You deserve to be happy with your decision and the team at Active Adults Realty understands this. Let us help you find the positive reasons to discover what life is like when you live in Delaware.
If you are preparing to buy or sell a home with active adult living in mind, why not sit down and discuss the best way to prepare to get a great deal. We’re happy to have a no-strings-attached discussion with you and help you best prepare and make sure Delaware is the right retirement destination for you. Schedule an appointment today.