Impact Of The New 2018 Tax Law On Real Estate Owners
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Impact Of The New 2018 Tax Law On Real Estate Owners

By Patrick following x   2018 Jan 7, 2:16pm 340 views   7 comments   watch   sfw   quote     share    


http://www.aspenvalues.com/Blog/Impact-of-the-New-2018-Tax-Law-on-Real-Estate-Owners
As a result of doubling the standard deduction to $12,000 for single filers and $24,000 for married filing jointly, according to Moody’s Analytics, as many as 38 million Americans who would otherwise itemize may instead choose the higher standard deduction under the new tax plan. The doubling of the standard interest deduction, in essence, removes a tax incentive of moving from renting a home to home ownership and a likely outcome will be fewer Americans choosing to become homeowners versus renters solely for the tax advantages.

Any home mortgage interest debt incurred before December 15, 2017, will continue to be eligible for the home mortgage interest deduction up to $1,000,000. Any home mortgage interest debt incurred after this date will be limited to no more than $750.000 qualifying for the home mortgage interest deduction. Beginning in 2018, the deduction for interest paid on a home equity line of credit (“HELOC”) will no longer be eligible for the home mortgage interest deduction. However, the new tax law preserves the deduction of mortgage debt using to acquire a second home which should have a positive impact on supporting property values in resort and vacation destinations.

State and local taxes (referred to collectively as “SALT”) can be deducted but will no longer be unlimited as under current tax law. The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. The top earners who live in high state tax like California, Connecticut, Oregon, Massachusetts, New Jersey, New York and other states will be negatively affected the most by no longer having the previous full federal deduction available. There is the potential for home values in high state tax areas on both the West and East Coast to see a reduction in property values. A National Association of REALTORS™ study determined there could be a drop in home prices up to ten (10) percent in these and other high state tax areas.


#housing
1   HeadSet   ignore (1)   2018 Jan 7, 3:43pm   ↑ like (3)   ↓ dislike (0)     quote      

Hopefully the primary residence and vacation Home Mortgage Deduction will be phased out completely. Interest should be deductible only as a business expense (property bought to rent or flip), never for personal consumption.
2   Satoshi_Nakamoto   ignore (0)   2018 Jan 7, 3:49pm   ↑ like (0)   ↓ dislike (0)     quote      

HeadSet says
Hopefully the primary residence and vacation Home Mortgage Deduction will be phased out completely. Interest should be deductible only as a business expense (property bought to rent or flip), never for personal consumption.


How do you propose to differentiate between "flippers" and "consumers"?
3   Sniper   ignore (10)   2018 Jan 7, 3:52pm   ↑ like (7)   ↓ dislike (1)     quote      

Patrick says
Beginning in 2018, the deduction for interest paid on a home equity line of credit (“HELOC”) will no longer be eligible for the home mortgage interest deduction.


This is where people who's houses really appreciated, like in CA, will get spanked the worst. Those who tapped into their equity for college, trips, new play toys, new pools, etc. will find that they no longer can deduct that interest.
4   errc   ignore (2)   2018 Jan 7, 8:05pm   ↑ like (0)   ↓ dislike (1)     quote      

Sniper says
Patrick says
Beginning in 2018, the deduction for interest paid on a home equity line of credit (“HELOC”) will no longer be eligible for the home mortgage interest deduction.

This is where people who's houses really appreciated, like in CA, will get spanked the worst. Those who tapped into their equity for college, trips, new play toys, new pools, etc. will find that they no longer can deduct that interest.


Yup, those of us levered way up at 0-3%, using OPM to bag triples doubles and homers, are going to get slaughtered by losing a small tax break. Lol
5   Strategist   ignore (1)   2018 Jan 7, 8:13pm   ↑ like (0)   ↓ dislike (0)     quote      

The new tax laws will be a negative for homeowners in some states. It still won't stop the price appreciation of homes.
6   RC2006   ignore (0)   2018 Jan 7, 8:28pm   ↑ like (0)   ↓ dislike (0)     quote      

So this only impacts properties over a million in LA lol.
7   FortWayne   ignore (0)   2018 Jan 7, 8:33pm   ↑ like (1)   ↓ dislike (0)     quote      

Satoshi_Nakamoto says
HeadSet says
Hopefully the primary residence and vacation Home Mortgage Deduction will be phased out completely. Interest should be deductible only as a business expense (property bought to rent or flip), never for personal consumption.


How do you propose to differentiate between "flippers" and "consumers"?


Primary Residence -> tax deduction
Not Primary Residence -> no tax deduction

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