The new tax bill is expected to be signed by the end of the year. Here is a summary of what it means for your real estate…
(By the way, be sure to RSVP for our Market Forecast on January 18th so you can hear our predictions for next year. Click HERE to register)
The new tax bill:
- Retains the current law for exclusion of capital gains on a principal residence. You still need to live in a home for 2 of the last 5 years to claim a capital gains exclusion. There was a risk that this would be changed to 5 of the last 8 years, but thankfully it did not.
- Reduces the limit of deductible mortgage debt from $1 Million to $750,000.
- Retains the ability to deduct mortgage debt on second homes.
- Allows for an itemized deduction of up to $10,000 for property taxes. When the bill was first introduced, there was no allowance for a property tax deduction.
- Retains the current 1031 like-kind exchange rules which is terrific news for investors.
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