The New Tax Bill- Key Points for Homeowners
Limit on property tax deduction
Taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes. Instead, the legislation allows individuals to deduct up to $10,000 in state and local income and property taxes (AKA SALT).
Downsized mortgage interest deduction
New home buyers would now only be able to deduct interest on the first $750,000 of mortgage debt on a newly-purchased home. That’s down from the current $1 million threshold, but higher than the $500,000 limit the House proposed in its tax overhaul in November. Current homeowners would not be affected by the lower cap. This is the case for primary and additional vacation homes.
Tax break stays for home sellers
Both the House and Senate bills originally wanted to scale back a tax break for homeowners when they sell their home for a gain that was NOT included in the final bill. Taxpayers will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains when they sell their primary home, as long as they’ve lived there for two of the past five years. A great article to refer to can be found here.
Please give me a call anytime to discuss home values and the market here in Lake Tahoe and Truckee. I am proud to be your Real Estate Agent here, and am happy to assist with any of your real estate endeavors here, and abroad.