by Jodi Summers

It takes a lot of gold to live in the Golden State, more so than the rest of the country. For Los Angeles, the cost of living in is 43% above the national average…and it’s getting more expensive for homeowners.

The recently passed Republican tax plan redefines rules that have shaped the housing market for decades.

Prior to 2016, homeowners were able deduct interest paid on as much as $1 million of mortgage debt from their taxes. The new tax reform allows that rule to remain in effect for existing and in-process loans, but the interest deduction on new purchases will only be for the first $500,000.

For the record, approximately 20% of Californians have residential loans that exceed $500,000, according to the National Low Income Housing Coalition. The percentage of people with big loans jumps to more like 50% when you talk about the pricy homes of the urban elites in Los Angeles, San Francisco and San Jose. As a point of reference, in September 2017, the median price for a single-family home in California was $555,410, according to the California Association of Realtors. In Los Angeles County, the median for all homes — houses and condominiums — was $575,000 according to CoreLogic.

As a point of reference, approximately 489,000 tax filers in the state would pay an average of $3,290 more in federal taxes if the $500,000 mortgage interest cap covered current loans, according to the nonpartisan Tax Policy Center.


…If the transformation in interest tax deduction is not enough incentive for Los Angelino homeowners to stay where they live, let’s add the change limiting property tax deductions. In one of the more controversial elements of the GOP tax overhaul, there is a new $10,000 annual cap on total deductions for state and local taxes, including income and property taxes. The limit on property-tax deductions impacts properties assessed at more than $800,000, which means many homes the Los Angeles area.  The rule disproportionately affects higher-tax and traditionally Democratic states such as California, New York and New Jersey. confirms prior to the property tax limits, anyone who itemizes their deductions on their federal tax return could subtract their state and local property taxes, as well as their state and local income taxes or general sales taxes.

In their bid to pay for the trillions in tax cuts and simplify the tax code, Republican leaders have proposed repealing most itemized deductions. The state and local tax deduction — aka SALT — is the biggest among them. Repealing it fully could bring in more than $1 trillion in revenue over a decade.

Given California’s high-income tax, the loss of the state and local deduction hurts. In 2014, Californians claimed $27 billion in federal deductions for state and local income taxes for real estate, personal property and other taxes, according to the California Franchise Tax Board. The average state and local tax deduction taken in California in 2015 was nearly $8,500 more than the new proposed cap, according to the Tax Policy Center. The majority of the SALT deductions claimed by those who make less than $50,000 come from property taxes, according to a report from the Government Finance Officers Association. By contrast more than 70% of the SALT deductions from those making more than $200,000 are due to income.

The results of the tax overhaul are bittersweet. Many Californians can expect to pay less taxes in 2019, according to the Institute on Taxation and Economic Policy. But the segment of people who will pay more is higher in California than in most states – 11%, or nearly 1.9 million taxpayers. And this percentage will rise over time. Economists notes that the bill changes how inflation is calculated, slowly pushing people into a higher tax bracket. By 2027, when most of the individual changes have expired, nearly 5.5 million, or 28% of California taxpayers, will see a higher tax bill.

“I think it could be a little bit of a restraint on growth,” observed Dave Smith, an economist at the Pepperdine University Graziadio School of Business and Management. “It won’t necessarily lead us to a turnaround or heading to a negative direction, but it will certainly pull back some of the positive things.”

In the future, state and local lawmakers would presumably face heightened pushback if they sought to raise taxes that couldn’t be deducted at the federal level. That would limit the ability of California to tax itself to fund more services or to close a budgetary gap, as it did in 2012 when voters approved higher income taxes on the state’s wealthy residents.


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About Jodi Summers

Jodi Summers
SoCal Investment Real Estate Group
Sotheby’s International Realty

Sotheby’s International Realty’s legacy dates back to 1744. Respected as one of the world’s oldest and largest fine art auctioneers, Sotheby’s has a longstanding tradition of bringing together buyers and sellers of fine property. Today, Sotheby’s International Realty boasts nearly 13,000 sales associates, located in more than 660 offices in 49 countries and territories. Broker Jodi Summers is the founder of the SoCal Investment Real Estate Group, a top producing team with Sotheby’s International Realty in the Los Angeles area.

With more than $140,000,000 in listed inventory, Jodi and the SoCal Investment Real Estate Group know finance, rules, regulations, procedures and methods. We are accurate, knowledgeable, timely and aware of how government shapes the cities of Southern California, including Santa Monica, Venice, Culver City, West Hollywood, Beverly Hills and Los Angeles.

A New York native, Jodi grew up working in the family business – marketing, Madison Avenue style. Childhood math quiz questions calculated demographic and psychographic percentages or analyzed the allocation of adverting dollars. Word games were for devising slogans.

“My marketing and communication skills have proven to be a true gift when it comes to promoting real estate,” observes Jodi. “And I am consistently able to get an exceptionally high price per square foot for my sellers.”

Discipline (Jodi holds a Black Belt in Tae Kwon Do), organization, motivation, excellent communication skills and knowing & satisfying the needs of her clients have been her essentials for running a successful business. A passion for investment real estate explains her emphasis in asset-yielding properties.

The City of Santa Monica chose Jodi to be part of the prestigious 9-member Civic Working Group to analyze and offer feedback on the future of the 10.5-acre Santa Monica Civic Auditorium site. Additionally, Jodi is a member of the National Association of Realtors, Beverly Hills + Greater West Side Association of Realtors, Action Apartment Association of Westside income property owners, the Santa Monica Conservancy historic preservation society, the Friends of Sunset Park community group, the Real Estate Investors Club L.A., the American Solar Energy Society, Sierra Club, California Parks Association and the Culver City Rock & Mineral Club. She is currently the Communications Chair for the Ocean Park Association in Santa Monica, and a partner in Save the Civic – a community group involved with the City in the adaptive reuse of the Santa Monica Civic Auditorium and adjacent area.

An honors graduate from the Walter Cronkite School of Journalism at Arizona State University, Jodi moved to California in the mid-’90s to achieve her goal of living by the beach with a hibiscus bush in her yard.

She has thrived as an entrepreneur in the entertainment, media and marketing industries. She has three books in publication with Allworth Press – The Interactive Music Handbook, Making and Marketing Music and Moving Up In the Music Business. Making and Marketing Music is in second edition. Check out her work on

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