The Income Tax Reform legislation being debated and worked on in Congress includes possible changes for current and future home owners.
The key changes being considered include:
- A reduction in the mortgage interest rate deduction cap. The House version of the bill would reduce the cap from the current $1 Million to $500,000. It does, however, retain the current deduction cap of $1 Million for current home owners. The Senate version would leave the cap at $1 Million.
- Reduce the amount of local property taxes that can be deducted to $10,000.
- Increase the standard deduction. The House version of tax reform would increase the standard deduction for individuals to $12,000 and for couples to $24,000. This would simplify taxes for many individuals who today might itemize deductions, and is expected to benefit those who do not have deductions (including non-home owners).
But, remember! It ain’t over,’ til it’s signed into law. The above changes could still change.
What to do?
- Contact your Congressional Representatives if you feel strongly about tax reform and want to voice your opinion.
- Go into home ownership with your eyes open! Sit down with a mortgage professional who can provide clear information about your future property taxes and mortgage interest. Take time to understand how home ownership will impact your specific tax situation either through your own research or by consulting an experienced tax professional.
For expert advice, fast preapprovals, and refinancing contact Melissa Milton or Julia Demeter.