The tax cut bill recently passed by the U.S. House of Representatives, with support from our Rep. David Schweikert (R-AZ-6), will likely hurt property values in Fountain Hills.
A 2005 study found that 32 percent of Fountain Hills’ then roughly 10,000 residences were occupied by winter visitors, rather than full-time residents, based on utility data. That percentage has surely increased over the last dozen years.
Some are rentals, but rentals generally require 12-month leases and are unlikely to be occupied by winter visitors.
The House tax cut bill eliminates the mortgage interest deduction for second homes, the kind typically owned by winter visitors. Eliminating this deduction will reduce incentives for snowbirds to own homes in Fountain Hills, and could result in a glut of homes on the market and thus lower market values for all homes.
More affordable housing would allow more young families to live in our community and support our schools, but it would also reduce property tax revenues to pay off our general obligation bonds.
This is a prime example of the law of unforeseen consequences.
