How Will Tax Reform Affect Your Home & Mortgage

Updated: Apr 8, 2018

Hi-lights of the largest tax reform in decades and the impact on one of your largest investmens - your home




Tax Reform has been a major topic in the real estate and mortgage industry. According to the National Association of Realtors, home price growth in 2018 is expected to range from 1—3%. While there was considerable change in the tax code, many coveted tax benefits to homeowners were retained. These include:

  • Capital Gains exclusion on sale of your primary residence was maintained. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale.

  • Mortgage Interest Is Still Deductible. But, reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17

  • Home Equity Loan Interest. The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.

  • Property Taxes. Allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.


The following websties provide more inclusive and more detailed information:


https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law


https://www.nar.realtor/tax-reform/the-tax-cuts-and-jobs-act-what-it-means-for-homeowners-and-real-estate-professionals


The information on this page is not intended to provide tax or accounting advice. Please verify with your CPA or tax professional.



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E: jmykala@dartbank.com
P: 734-223-8555
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