Vista Sotheby's: The Tax Cuts and Jobs Act - What it Means for Homeowners and Real Estate Professionals

  • Jon Grogan
  • 12/29/17
 
Everyone,

Congress has now passed a sweeping tax bill that will affect almost every American. In addition to changing tax rates and deductions, these new rules affect a wide variety of personal and business activity.

In particular, the mortgage interest deduction has been significantly affected:

Mortgage Interest Deduction

  • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
  • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
  • 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.
  • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
  • The House-passed bill would have capped the mortgage interest limit at $500,000 and eliminated the deduction for second homes.
The National Association of Realtors® has compiled a summary of provisions of interest, which may be of relevance to you. Click here to check it out.
 
 
 

Work With Jon

He knew his master’s degree in counseling psychology combined with his exceptional analytical real estate talents would be a great fit to support owners, buyers, tenants, and vendors navigate through the difficulties of a real estate transaction.

Contact Us

Follow Us on Instagram