The new law which was signed last December 22, 2017 and has taken effect last January 1, 2018 has been the first major tax reform since President Ronald Reagan. It aims to redistribute the county’s wealth. If you are planning to buy or sell a home this year, here are some major points on the tax reform that you should take note of:
Exemption from Estate Tax is almost for everyone. Previously at $5.49 million for individuals and at $10.98 million for married couples, the amount of tax exempt has been doubled.
If a homeowner sells their primary home and have lived there for 2 of the past 5 years, they would be able to exclude up to $500,000(or $250,000 for single filers) from capital gains.
There is now a $10,000 cap for state and local tax deduction, or SALT compared to before where filers could deduct an unlimited amount for state and local property taxes, plus income or sales taxes.
From $1 million, a new mortgage can now only deduct up to $750,000. People that are looking for more expensive homes in the coastal regions are more likely going to feel this change.
Mortgage debts existing on 12/14/2017 up to $1 million can be refinanced by Homeowners as long as the new loan does not exceed the amount of existing mortgage being refinanced.
Home Buying decisions are going to be highly effected by this change. Do your research. If you have further questions and clarifications about the new law and how it affects the real estate industry, you can call us and we would be glad to address them. Contact me today. 954.383.4049