The luxury real estate market is bracing for potential changes under either a Donald Trump or Kamala Harris administration. Industry experts are parsing campaign promises and policy proposals to gauge their impact on high-end properties and wealthy investors.
Despite differences in overall policy approaches, both candidates have expressed interest in addressing housing affordability and supply issues. However, their methods and potential effects on the luxury market are divided.
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Trump’s proposed tariffs on imports, particularly a potential 60% levy on Chinese goods, could have far-reaching consequences, according to a report issued by Mansion Global. Jonathan Miller of real estate appraisal firm Miller Samuel said, “More inflation would affect the financial markets. Titans of industry and the affluent are very focused on financial markets and Fed policy has a significant impact.” Miller said the Trump tariffs are “not good for housing” overall.
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On the tax front, Trump’s stance on the state and local tax (SALT) deduction cap could benefit luxury homeowners. Ralph McLaughlin, senior economist at Realtor.com, said that removing the $10,000 SALT deduction cap “would benefit existing higher-income earners and owners of luxury real estate. It might draw in additional interest into it.”
Harris’s tax proposals, on the other hand, could create headwinds for the luxury market. Her plan to increase capital gains tax to 28% plus an additional 5% for high earners could impact property sales. Housing journalist Lance Lambert said, “A lot of normal people won’t get hit, but the wealthy who have expensive homes will get hit.” Lambert suggests it might lead to less churn in the luxury real estate market, potentially affecting luxury real estate agents’ bottom lines.
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Both candidates have expressed interest in opening federal lands for housing development. While it could ease the overall housing shortage, its impact on luxury real estate is uncertain. McLaughlin said that without strict guidelines, “homebuilders could flock to more beautiful and desirable locations like those near national parks to build higher-end products.”
Harris’s support for the Stop Predatory Investing Act, which would remove tax incentives for large corporate investors in single-family rentals, has also raised concerns, according to the report. Jason Katz, a private wealth adviser at UBS, said, “If you take those people out by the knees, the supply of multifamily could be dramatically impacted.”
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Bess Freedman, CEO of Brown Harris Stevens, noted the potential impact of political rhetoric on market sentiment. Referring to Trump’s past comments about certain cities, she said, “If your narrative is one of, ‘It’s not safe, there’s crime, it’s dirty, it’s not a good place to live,’ – that’s a deterrent for people who might want to buy here.”
Despite the uncertainty surrounding campaign promises and their eventual implementation, wealthy investors appear cautiously optimistic. UBS’s September Investor Watch report found that 84% of surveyed investors consider the economy the most important election issue, with 51% believing Trump is better equipped to address key economic concerns. However, 57% are leaning toward voting for Harris.
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As the luxury real estate market navigates these potential policy shifts, it’s clear that both candidates’ approaches could have significant, yet differing, impacts. Whether through tariffs, taxes, or land use policies, the next four years promise to reshape the landscape for high-end property investors and developers.
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This article Trump’s Tariffs Vs. Harris’s Taxes: Which Will Hit Luxury Real Estate Harder? Experts Weigh In originally appeared on Benzinga.com
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