Briggs Freeman Sotheby’s International Realty | How the Tax Reform is Affecting Home Ownership
Just as the agents of Briggs Freeman Sotheby’s International Realty have invaluable knowledge about homes, neighborhoods and market trends, trusted sources for how the new tax reform will affect home ownership include the National Association of Realtors and news organizations such as Forbes and The Wall Street Journal, the latter from which much of this information was adapted.
Prior to the tax reform, homeowners could deduct the interest on their mortgage debt up to $1 million. The new law cuts the interest deduction on mortgage debt up to $750,000 for new mortgages. Current homeowners are not impacted by this change. Also, homeowners are no longer allowed to deduct the interest they pay on home-equity debt. It is important to note that the home-equity line of credit (HELOC) deduction is not grandfathered. Individuals with a HELOC will lose the deduction.
The overhaul curbs how much homeowners can deduct for paying property taxes. The previous tax law allowed taxpayers to deduct state and local income or sales taxes and property taxes. Property, state and local income taxes face a combined $10,000 deduction limit. With the standard deduction doubling, tax rates dropping, and a $10,000 maximum on property-tax deduction in 2018, it could make sense to take as many deductions as possible for 2017. Ask your tax preparer what works best.
One tax break that remains in place is a rule that lets homeowners shield some of the profits they make selling their home from capital-gains taxes. For individuals, the break applies to up to $250,000 in profits on the sale of a principal residence; for married couples, it is up to $500,000.
If considering buying or selling in 2018, a top ally is any of the agents with Briggs Freeman Sotheby’s International Realty. To see all the homes, ranches and land in Fort Worth, all of North Texas and around the world visit briggsfreeman.com.
This story was originally published January 7, 2018 at 12:00 AM with the headline "Briggs Freeman Sotheby’s International Realty | How the Tax Reform is Affecting Home Ownership."