What the new tax plan means for you.

What the new tax plan means for you.

In a new series, we'll be speaking with different service providers who act as advisors when it comes to real estate matters.  The first in this series is with Robert Demmett, a Partner at WithumSmith + Brown, PC, one of the largest public accounting firms.

Here, Bob provides more color on changes contained in the “Tax Cuts and Jobs Act,” and the resulting costs of home ownership so that prospective purchasers and sellers can become more familiar with these tax implications.

One of the first advisors called.

As a CPA, I am usually one of the first advisors called by clients looking to purchase a house or making an upgrade.  The conversation usually starts with the question "how much can I afford?" but quickly gets rephrased as "how much can I afford on a monthly basis?" 

Unlike other large recurring expenditures, determining the monthly amount that can be spent is complicated, due to the income tax implications. After all, most of the largest monthly expenses related to your home are tax deductible and may be partially offset by reducing your monthly income tax withholding; resulting in a larger net paycheck. 

How will taxes affect me?

Since the “Tax Cuts and Jobs Act” passed in December 2017, the computation of the monthly“after-tax” cost of owning a home has drastically changed, resulting in many indifivuals revisiting what they can afford on a monthly basis. We explored these additional monthly costs, through an illustration of typical residences priced at $1 million, $2 million and $3 million.

About Robert E. Demmett:


Robert E. Demmett is a Partner at WithumSmith + Brown and has over 30 years of professional accounting experience.  He is a certified public accountant in New York.  

Bob specializes in tax and financial planning for high-net-worth individuals as well as handling tax and compliance issues for partnerships, corporations and other entities. 

For any questions relating to this article or other tax matters, you can contact Robert directly.

DISCLAIMER: VOR, Inc and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Proposed Tax Plan Implications

Proposed Tax Plan Implications

While the GOP Tax Plan could create significant tax savings at the corporate level, homeowners could be hit the hardest. Property values are being forecasted to drop by up to 15% in states like New York, New Jersey, D.C., Illinois, and Connecticut. 

What's driving these prices down?

  1. Lowering the cap on the mortgage interest rate deduction from loans of $1 million to $750,000 and limiting the deduction to one "qualified home".
  2. Eliminating or capping the state and local tax deduction (SALT) at $10,000.
  3. Extending the primary residence requirement to five of the preceding eight years (from two of the preceding five years) and limiting the use of the tax-free exclusion to once every five years, up from the current two years.
  4. Eliminating deductions for expenses related to moving from one home to another.

How is each state effected?

To demonstrate the potential impact of this plan, we pulled data from Moody's Analytics, the National Association of Realtors, and the IRS, to analyze how the proposed tax deductions, capital gains exemptions, and current housing makeup could effect the average house price in each state.

How Tax Reform Impacts Homeowners in Each State: Data Source: NAR - THESE FIGURES ARE BASED OFF OF THE PREVIOUS MID AT $500K, WHICH HAS SINCE BEEN INCREASED TO $750K.

Who is hit the hardest?

  • Owners in higher-tax counties (the average Manhattan property tax deduction is $22,000, according to the NY Times). 
  • Owners financing second homes.
  • Owners taking on mortgages between $750,000 and $1 million.
  • Owners planning to live in their home for less than 5 years.

Moody's Analytics also broke out the numbers on a per County basis. Source: Here Are the Housing Markets That Are Going to Get Hammered by the Republican Tax Plan.




Who is impacted least?

  • Low- to moderate-income earners who use the standard deduction ($6,350 for singles and $12,700 for couples) as opposed to itemizing.
  • Landlords who write off business expenses. Under the proposed plan, Landlords also stand to pay over a third less in corporate taxes.

How Tax Reform Impacts Homeowners in Each State: Data Source: NAR - THESE FIGURES ARE BASED OFF OF THE PREVIOUS MID AT $500K, WHICH HAS SINCE BEEN INCREASED TO $750K.

What does this mean for me?

While the tax plan has not yet passed, it could have a significant impact upon homeowners, if it does. You should speak with your accountant regarding your particular tax situation to find out how you will be directly impacted.

With respect to property prices, each state and county will ultimately be impacted differently. These impacts will likely be reflected in the form of improperly priced listings sitting on the market longer, and average pricing to remain flat for the immediate 6 - 18 months, stabilizing near Q3 2019. 

If you have any questions regarding the pricing impact on your neighborhood and the timeline, contact us, or speak with a local real estate advisor to determine whether buying or selling makes sense for you.

Tax Hacks

  • Owners:  If you have a tax bill over $10K, consider pre-paying your 2018 property taxes (as long as you are not subject to the AMT) to take advantage of the current deduction. 
  • Buyers: If you are taking a mortgage or refinance more than $750K, do it now to grandfather in your mortgage deduction (also not a bad idea considering the Fed's plan to hike rates).

UPDATE: Since publishing this article, the GOP Tax Plan has increased the Mortgage Interest Deduction from $500K as proposed to $750K.


DISCLAIMER: VOR, Inc and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Thanksgiving Smart Home Savings

Thanksgiving Smart Home Savings

Thanksgiving is almost here!  And that means that you're likely already scouting out the hottest Black Friday and Cyber Monday deals and where to get them.

We spoke with Brett Helsham, Interior Designer and the Founder of Brett Helsham Designs, to find out what her clients have been looking for in their home design. 

Not surprisingly, Brett told us that "there is currently lot of movement towards products that integrate with Alexa's smart home hands free technology" and that her clients "are looking for sound, drapery, and lighting that can all be controlled remotely" with the "the iPhone or iPad being the module of choice." 

And if you're lucky enough to have a home gym, Brett also told us that "the Peloton bike has been a big request" from her clients, as well.

Check out Amazon's saving on Alexa items, below, for this Black Friday.

For a special Thanksgiving Thank You - we're giving away your favorite smart home product!

Thanksgiving Raffle Results (%)



Sonos is your winner!

Our staff's favorite Alexa deals:

Amazon Echo Dot for $29.99 (save $20) - see current price - The Echo Dot is cheaper than Prime Day’s price of $34.99 and Black Friday’s 2016 Price of $39.99. This is the lowest price ever for the Echo Dot and therefore a very good deal.

Amazon All-New Echo for $79.99 (save $20) - see current price - This is a new model, but the original Echo was available for $89.99 on Prime Day 2017 and $139.99 on Black Friday 2016.

Amazon Echo Plus for $119.99 (save $30) - see current price - This is new for Black Friday 2017.

Amazon Tap for $79.99 (save $50) - see current price - The Tap was available for $79.99 on Prime Day 2017, so the price is being matched here. It was available for $89.99 on Black Friday last year.

Amazon Fire HD 8 for $49.99 (save $30) - see current price - The Fire HD 8 was available for $49.99 on Prime Day earlier this year. It was available or $59.99 on Black Friday last year.

Amazon Cloud Cam for $99.99 (save $20) - see current price - Unavailable on Prime Day and Black Friday last year.

Why Winter Is The Best Time To Buy

Why Winter Is The Best Time To Buy

Most buyers have the perception that winter is the worst time to look for a new home. 

However, from aesthetics and timing, to supply and demand drivers, and discounts - there are so many reasons to make the Winter the time to start your search. Here are just a few:

The Circumstances are in your Favor

Winter sellers are usually motivated by externalities that are out of their control, giving you a better chance to get a deal.  Since families with children tend to purchase to coincide with September school openings, Winter buyers are often forced to sell for different reasons.  Perhaps a job offer, pay cut, estate sale, or personal issues are forcing them to list their home at an inopportune time.

Less Competition

Winter buyers have less buyer competition in the marketplace - sellers know this so they want to be more competitive in the winter market. This also means there is a smaller chance of multiple offers on the house you want. Without the competition, you'll likely have more leverage when it comes to negotiations, as well.

Sellers are Motivated

Many Sellers who put their properties on the market in the winter really need to sell, giving Buyers more purchasing power or room for negotiating. This helps to create an instant increase in equity after closing. 

Agents are Motivated

Low activity during the winter months means you will have the undivided attention of your agent or broker and they will be working harder for you. These lean months of low sales volume may encourage them to try just a bit harder to negotiate a sale.

Flexible Timelines

If the home will require construction, or you need to be flexible on closing, this is probably the time to make the offer. Contractors are less busy during the winter which gives buyers an opportunity to get their remodeling done at a better cost in less time.

Timing the Market

Winter is a great opportunity to buy at last year's price and get a jump on the Spring market before the new "sold" stats are released early Spring/Summer.

Curb Appeal

That grey, dismal view of the naked tree outside of the window and your neighbor's outdoor space become a benefit to the savvy winter buyer who can pre visualize the tree in full bloom, birds singing and pots of flowers on the terraces. 


And finally, the number one reason that Winter buyers win - discounts. More than 20% of homes in NYC that went into contract within three days of Thanksgiving and Christmas were discounted more than 10% - maybe it's the holiday spirit?

As the saying goes, "If you like how this home looks in the Winter, you will LOVE it in Spring."


New York's Coolest Hood

New York's Coolest Hood

There’s no doubt that Brooklyn is the reigning King of Cool when it comes to New York City neighborhoods. But within Brooklyn there are dozens of outposts that vary dramatically in tone and vibe. One neighborhood to visit is Sunset Park, which offers great views of the Manhattan skyline. “Sunset Park sits below Park Slope on the south and western borders of Green-Wood Cemetery, and hosts a heady mix of cultures and traditions,” says New York-based Robert Balkovich, a Lonely Planet writer. This area cuts a wide swath through Brooklyn, with Green-Wood consisting of 478 acres. You can even take a trolly tour of the ground and see some of the famous burials, including artist Jean-Michel Basquiat and musician Leonard Bernstein.

Read more at Time's 10 Coolest Neighborhoods in America

So, how has Sunset Park fared?

Property values have risen 100% in the last 5 years! 

sunset park.PNG

Have you missed the boat, or are rising property values just getting started Get in touch to speak with a local expert and get an insider's view.

10 Ways To Increase Home Values

10 Ways To Increase Home Values

Your goal is to make the most amount of money on your sale, and our job is to help you achieve that goal.  Take these 10 tips that we've found make the difference between a listing that sits for months and one that sells over its asking price with multiple offers in just a few days.

1. Market timing is critical.

A good agent will help you determine timing as it relates to the other properties on the market, and seasonality. Choosing the right time to market, such as Spring, when there is limited inventory and abundance of buyers may be better for some, while a market with limited inventory may be better for others.

2. Spruce up the interior: paint touch ups, all neutral colors.

A little paint job can go a long way. Light colors will help mask that purple cabinetry, appealing to everyone's taste.

3. Update kitchens and baths.

Sometimes all it takes is resurfacing cabinet doors and installing new hardware. You don't need a new slab of marble or a $15,000 budget to see results.

4. De-clutter and organize your closets.

Buyers will look everywhere! If your closets look like a dump, they'll wonder how the rest of the house has been kept.

5. Stage your home for sale by hiring a professional. Best money spent!

An awkward layout, furniture that doesn't fit, or drab furnishings can be the difference between a bidding war and a price reduction. You want to get it right the first time around.

6. Get a professional to deep-clean.

Make it sparkle. 

7. Check lighting to make sure all bulbs match and are working.

The importance of lighting cannot be understated! For such a minimal cost, your return is a well lit and nicely presented property. 

8. Consider your own inspection.

If you have any concerns about the mechanics, structure or electrical systems, have a professional home inspection done to ensure that all systems are running properly or be able to anticipate what will turn up.

9. Add potted plants and flowers to empty spaces and remove any unhealthy plants that detract from your home's appearance.

A nice touch of green creates a welcoming environment.

10. Get professional photos taken.

Perhaps the largest impact on your sale will be how it presents online. A professional will know the right angles, and lighting to show your home so that buyers will want to see it.


5 Reasons Why You Need A Buyers Agent

5 Reasons Why You Need A Buyers Agent

Using the listing agent means I'll save money... is the most common fallacy in real estate.

YES, you read that correctly. The truth is that you stand to lose way more than you could possibly gain without having an agent on your side to walk you through the process.

To prove it, we talked to both buyers agents and sellers agents with more than 30 years of experience and shared their thoughts below:

1. It has absolutely no affect on the purchase price. 

None. The buyer does not get a better deal or price when making an offer with listing agent. The total commission is already included in the agent’s agreement, regardless of whether or not there is a buyer’s Agent involved. We know it sounds repetitive...

2. You want to see the entire market, not just one listing.

The listing agent has less motivation to show buyer comparable properties or proper comp data! This means you're often taking cherry-picked listings that support pricing and have no objective source of advice! Sellers agents are often so preoccupied with their own listings that they won't bother to show you listings that aren't theirs.

3. Due diligence is absolutely necessary!

A buyer's agent will do their own due diligence to research everything about the particular property. Working with a selling agent guarantees that you won’t see the full picture (in fact, you'll probably be lucky to see half of it). According to the Realtor Code of Ethics, a seller's agent must disclose only what he/she knows about the property, or what the Seller has shared. Having your own agent will ensure that you turn over every stone.

4. You need their experience. 

You may buy or sell one to five properties in your lifetime. A good agent sells that many each month. The amount of knowledge and expertise that an experienced agent has built through the years just can't be replaced. 

You need someone on your side that knows the neighborhood, understands pricing and deal structure, and will go to the mat for you to help you negotiate a better price and beat competing offers. If something goes wrong with the financing, taxes, title, insurance, contracting, building code or the contract, do you really have the knowledge or the time to handle the matter without an expert?

5. It will save you time, stress, and money! 

Buying real estate, with a great team alongside you is tough enough, why would you want to make it harder? You, as the buyer do not need to run around getting in touch with each individual listing agent on a property. It wastes a lot of time and in some cases the time can cost you to lose the opportunity to see and/or purchase the property. Anticipating every step along the way means that you'll be ready to have a fast and painless transaction. 

BONUS - It doesn't cost you a penny!

Since the seller pays the buying agent, this is likely the only time in your life that someone will pay for you to have your own representation, so take advantage of it! You wouldn't turn down a free attorney, would you?


Create a Bidding War in Just 4 Days

Create a Bidding War in Just 4 Days

When our seller approached us and said that he was willing to do anything to get the most value out of his apartment before listing, we knew we had the opportunity to shine.

A kitchen makeover, new tub and fixtures, a fresh coat of paint, the right furniture and some beautiful photography - all done for under $5K - resulted in a flurry of offers (more than 10% over ask) and a closing price of $30K more than what any previous unit in the line had sold for.

So what contributed to the perfect storm?

  1. A little reno goes a long, long way
  2. Priced accurately to get the most foot traffic
  3. Tasteful staging
  4. Availability to show at ALL times (8am to 8pm)
  5. Lightning fast responsiveness (less than one hour) with potential buyers