Have you heard about the new tax changes? Here are four of them that will affect homeowners.
How is the new tax reform going to affect real estate? Here are four changes that you should know about:
1. The deduction for your property taxes. You used to be able to deduct all of it. Now, your deductions will be capped at $10,000.
2. Mortgage interest. Your interest deductions will be affected as well. You used to be able to write off up to $1 million in mortgage interest. Now, you will only be able to write off $500,000.
3. Capital gains taxes. The deduction will be the same ($250,000 for single persons and $500,000 for couples), but going forward you will only be able to claim this deduction if you’ve lived in the home as a primary residence for five of the last eight years. That is a change from the previous rule, which said you only had to live in the home as a primary residence for two of the last five years.
4. Moving expenses. You will no longer be able to deduct moving expenses on your federal tax return. Unfortunately, that’s not going to be allowed anymore going forward.
"The capital gains deduction will be the same, but the requirements have changed."
This tax reform will affect a lot of homeowners and will make homeownership less attractive to some people. It will be very interesting to see how this affects our market, which still has extremely tight inventory.
If you have any questions for us about these changes or anything else related to real estate, give me a call or send me an email. I look forward to hearing from you.