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How the New Tax Bill Will Affect Homeowners

The new tax reform bill that was signed into law by Congress will be changing taxes related to home ownership in 2018 and beyond. If you are a homeowner, or are considering becoming one, be sure to meet with your tax professional to discuss how these changes will impact you.

SOME KEY CHANGES TO NOTE:

MORTGAGE INTEREST: Prior to the new tax bill, mortgage interest was deductible up to $1,000,000. With the tax reform bill in effect, it will only be deductible up to $750,000. This applies to all homes purchased after December 15, 2017 as well as second homes.

MOVING EXPENSES: Before this year, qualified homeowners relocating for a job could deduct their moving expenses from their taxable income. Moving forward, this deduction is only available to active duty members of the armed forces.

HOME EQUITY LINES OF CREDIT: Mortgage interest paid on Home Equity Lines of Credit will no longer be tax deductible.

STANDARD DEDUCTIONS: The tax reform bill will also change the standard deductions available to each household. With the new tax reform bill in place, the standard deduction has nearly doubled from $12,700 to $24,000. As a result, many homeowners may choose not to itemize their deductions in 2018.

If you have questions related to home ownership, the benefits of buying vs. renting, or the mortgage process, our experienced Loan Officers are available to help.
Source: https://www.congress.gov/bill/115th-congress/house-bill/1