How a National Sales Tax Would Affect Real Estate? Housing Market News

How would a national sales tax on real estate work? A national sales tax on real estate would have dramatic effects on the housing market. Currently the only taxes on real estate are capital gains taxes and state transfer taxes.

A proposal to abolish the IRS and replace the income tax with a national sales tax is unlikely to be implemented, but it could mean big changes for the real estate housing market. New home construction would certainly be taxed as well as home improvements. Also its likely that resale homes would be subject to some sort of national sales tax as well.

A national sales tax, also known as a value-added tax (VAT), would likely have a direct effect on real estate, as real estate transactions are typically not subject to sales tax. However, the overall economic impact of a national sales tax could potentially affect the real estate market indirectly. If a national sales tax leads to increased inflation or a decrease in consumer spending, it could potentially slow down the real estate market. Additionally, if a national sales tax is implemented in conjunction with other tax changes, such as changes to deductions for mortgage interest or property taxes, it could have a more direct impact on the real estate market.

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