Under the new tax law there are some items that homeowners should be aware of. Thanks to our friends at the Texas Association of Realtors for breaking it down… How this affects you personally is a question for your CPA – that said, the below should offer you some idea of what to expect.
Here are the changes:
- Mortgage Interest Deduction
- Reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17
- Current loans up to $1 million are grandfathered and not subject to the new cap. Neither limit is indexed for inflation
- Home Equity Loan Interest Deduction
- Repeals the deduction for interest paid on home equity debt through 12/31/25
- Interest remains deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve on a residence
- State and Local Property Tax Deduction
- Caps the itemized deduction for state and local property taxes (and income or sales taxes) at $10,000
- This limit is not indexed for inflation
- This deduction was previous unlimite
- Moving expenses
- Repeals the moving expense deduction, except for members of the Armed Force
- Standard Deductions
- Doubles the standard deductions for individual filers (to $12,000) and joint filers (to $24,000). This deduction is indexed for inflation
What Will Not Change
- Like-kind Exchanges for Real Property
- Retains the Section 1031 Like Kind Exchange rule for real property, but repeals the use of Section 1031 for personal property
- Capital Gains
- Retains current law related to capital gains on the sale of principal residence
- Deductions for Medical Expenses and Student Loan Interest
- Retains current law for these itemized deductions
There are a number of zip codes in the area that will likely be impacted by these changes – see the maps below. Additionally, there are certainly areas of Williamson County that this will affect.
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