On the horizon: 2 surprising real estate trends
WASHINGTON – June 3, 2014 – Two issues noted at the National Association of Realtors® (NAR) recent convention had shock value, according to a blog by Graham Wood, senior editor for Realtor® Magazine. He noted the following in his blog:
Tenants may legally use marijuana
If marijuana is legal for medical reasons, landlords may be forced to allow its use by tenants.
"There's no constitutional right to smoke pot," Glen D. Kimball, a partner at law firm O'Connor Kimball LLP said, "but if you want to stop someone from smoking pot, you may need to reasonably accommodate medical marijuana."
There's little legal precedent for the issue, but Floridians will vote on a constitutional amendment legalizing medical use of marijuana at the ballot in November. Nationwide, legalization is spreading, with two states so far – Colorado and Washington – that allow recreational pot smoking.
"You can't rely on a 'no smoking' policy to cover pot, because 'no smoking' connotes tobacco – and pot is not tobacco," Kimball said. "Pot is still considered a controlled substance by the federal government, but until it makes up its mind about medical marijuana, enforcement is going to be an issue."
Kimball suggests that landlords could one day face another question: May tenants grow their own plants? If it becomes medically legal, tenants could claim the right to grow their own if the lease doesn't specifically ban it.
Tax reform could neuter MID
Wood said that a number of Realtors were surprised that the mortgage interest tax deduction (MID) – a benefit to homeownership because it cuts their taxes – could be in jeopardy.
John Buckley, a former chief tax counsel of the House Ways & Means Committee, said that a tax reform proposal from Rep. David Camp (R-Mich.) doesn't directly impact the MID beyond cutting the cap to $500,000. However, it changes the way MID functions – and that, in turn, could impact homeowners.
"Essentially, I think it is tantamount to removing these deductions, all in the context of a bill that pretends not to touch the mortgage interest deduction," Buckley said.
According to Buckley, the tax reform package would increase the standard deduction for all taxpayers and repeal deductions for state and local taxes. That would make the standard deduction more attractive compared to itemizing deductions since the latter includes local and state taxes paid.
And if fewer people itemize, Buckley says, the MID – one of those itemized deductions – would be "wasted."
Source: Graham Wood, senior editor for Realtor Magazine; multimedia web producer Meg White contributed to the report.© 2014 Florida Realtors®