Legislative & Economic Update
Property Tax Relief
Earlier in 2015, we told you about a piece of legislation that would have eliminated the school tax portion of property taxes throughout Pennsylvania (Property Tax Independence Act: SB76/HB76). The shortfall in tax revenue would be made up with increases in the state sales tax (from 6% to 7%) and the state income tax (from 3.07% to 4.34%).
In early December 2015, the bill was voted down. Property owners will continue to pay annual school taxes for the foreseeable future. However, at the time of this writing, the state is considering even greater increases in the sales and income taxes to offset existing budget shortfalls (never mind tax relief). The budget battle is fierce; however, some lawmakers would still like to incorporate some level of property tax relief to struggling seniors.
Interest Rate Increases
For the first time since 2006, the Federal Reserve raised interest rates on December 16, 2015 by a quarter of a percent (0-0.25% to 0.25-0.5%). Four additional quarter point increases are anticipated during 2016. This will likely cause home mortgage interest rates on a 30-year fixed rate loan to reach or exceed 5% by the end of the year.
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The Scott Loper Team
Scott & Lisa Loper