Changes for Homeowners Tax Deductions?
Are tax deductions for owning a home changing? The short answer is yes, but how exactly? Watch the video to find out. If you'd prefer to read about the changes, the video script can be found below.
For decades, the housing industry touted the tax benefits of owning a home (and I’m talking about a primary residence, not an investment). If you itemized your deductions, you could deduct the property taxes and home loan interest for loans up to $1 million. But with the overhaul of the tax code in 2017, the standard deduction got so much larger so fewer people itemize today. In fact, I’ve seen numbers that estimate only 10 to 12% of filers are now itemizinge. How does it impact housing? Well, the deduction for property taxes is now $10,000. If you pay more than that, you can’t deduct anything over the $10k. Further, while you can deduct interest on a home loan, it’s only on the first $750,000 in debt for loans taken out since the law passed ($375,000 if a single filer). So while owning a home has many great benefits, the well-known tax benefits of the past don’t factor in as much for today’s buyer. Of course, talk to your tax consultant for more information. I’m Craig Smyser with 1835 Realty.