6. The new U.S. tax code for income taxes has now a new cap on the deduction of state tax + property taxes. Now the deduction is limited to $10,000 maximum a year for all real estate taxes paid + state tax. How do you think this policy is going to affect the housing market in the short and long run in the states that have high state tax and high property tax as New York or California? Use the residential investment model, use the graphs. 6. The new U.S. tax code for income taxes has now a new cap on the deduction of state tax + property taxes. Now the deduction is limited to $10,000 maximum a year for all real estate taxes paid + state tax. How do you think this policy is going to affect the housing market in the short and long run in the states that have high state tax and high property tax as New York or California? Use the residential investment model, use the graphs