Central Mass. affordability helps ease tax bill pain
Although the details from the tax overhaul passed by Republicans in Congress and signed by President Donald Trump in late December are still being picked over, one thing is abundantly clear: Higher cost states are about to get more expensive.
States like Massachusetts, Connecticut, New York, New Jersey and California – which have voted majority Democratic in the last several elections – are being unfairly impacted by the new law. The new law places a $10,000 cap on state and local tax deductions made on federal tax returns, as opposed to being able to deduct all of your property taxes and other state taxes on your federal return – which was previously allowed.
This hurts Massachusetts and other high-property-value states more than the Alabamas and West Virginias of the nation because residents end up having to shoulder more of the tax burden. However, real estate values vary widely in our state, with the inner Boston suburbs dominating the list of high-cost towns, where even moderately sized homes sell in the seven figures.
The median 2017 home price in Worcester County (through November) was $259,000. While that is significantly more than the $102,000 median home value in West Virginia, according to real estate listing site Zillow, Worcester County is still less expensive than 10 of the other 13 Massachusetts counties. Only the western counties of Berkshire, Franklin and Hampden have a lower cost of housing.
While Central Massachusetts' more expensive communities like Harvard, Boxborough, Southborough and Paxton will likely be more affected by the new cap, the vast majority of towns in Central Massachusetts will face a minimal impact when compared to the eastern part of the state.
As Staff Writer Zachary Comeau detailed in his story on Page 4, Worcester County is already becoming a magnet for home ownership. With high prices and high demand pricing people out of Greater Boston, Worcester County had the second-most home sales in November with 762 while Middlesex County – home to MetroWest communities like Marlborough and Hudson – had the most with 1,005. This, coupled with Worcester's rising profile as a cultural hub, is attracting more people to the city and the region. While the GE's of the world can move into expensive digs in Boston and not worry about its top executives affording life in Greater Boston, for most firms looking at Massachusetts, cost of living is an important factor.
The new tax plan may cut taxes on millions of Americans, but like every new law, there will be winners and losers. And while the new tax code may prove to be net negative for the state's residents, the hit will be a lot lighter in affordable communities like Greater Worcester.
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