Tax Cuts and Jobs Act…

The National Association of Realtors recently put out a report discussing the impact of the new tax laws on Home Ownership, and not surprisingly, the media has not covered the changes very well.  Here’s a summary of what the bill does say-

Deductible mortgage limit after 12/14/17 is $750,000. Current loans are NOT subject to the cap.

This is significant; especially in light of the fact that a quick analysis of the single family homes sold in the Greater Capital District in 2017(11,994), only 145 of them were over $750,000.  Thus, the new tax law only impacts some 1+% of the homes sold last year. 99% are less than the $750,000 cap!  (Note too, the cap is the MORTGAGE amount, so the actual home values could be much higher with the downpayments factored in)

The new bill eliminates the tax deduction for interest paid on home equity loans through 12/31/25; however if the loan is used to substantially improve the residence-interest is STILL DEDUCTIBLE!

So, fix up your home, interest is deductible.

State and local property taxes no longer deductible…well yes, but a deduction is allowed up to $10,000.

Add up your tax burden; many of you reading this will fall below the $10,000 cap, and thus can still take your deduction(up to the $10,000 cap).

The reason our Governor is so upset is all his downstate friends are screaming; as their higher property values and higher taxes take the hit.

The new tax law has had a profound impact on wages, bonuses, and corporate investment in our Country thusfar, and will have limited impact on the majority of homeowners in our area-I see it as a predominately win/win scenario for the majority of us in the middle class.

Lastly, speak to your tax professional for the best counsel on your individual situation.