How the Proposed Tax Reform Affects Home Owners

Hello Hampton Roads,

From headlines to talking heads, the House and Senate tax bills have been garnering much criticism as many items in both bills can be seen as hurtful to home owners.  The NAR (National Association of Realtors), the largest trade association in the United States, calls it  "bad news" and "a tax hike on homeowners."

The NAR's statement can be read here.

In terms of  how these bills affect home ownership, here is what is proposed:

Home Mortgage Deduction
House:  Limits to $500,000.00 Not allowed on 2nd homes.
Senate:  Limits ot $1,000.000.00 (currently where it is today) Allowed on 2nd homes.

State and Local Tax Deduction
House & Senate:  Repeal the deduction for income or state taxes. Limits property tax deduction to $10,000.00 (not indexed to inflation)

Capital Gains Exemption on the Sale of  Primary Residences
House:  Must own & live in the property for atleast 5 of the last 8 years.  Income limits apply.
Senate:  Must own & live in the property for atleast 5 of the last 8 year.   No income limits apply.

Home Equity Loan Deduction
House:  Eliminated for new loans.
Senate:  Eliminated for new and current loans.

Moving Expense Deduction
House:  Eliminated.
Senate:  Retained only for active military owners.

By limiting or eliminating these deductions millions of homeowners throughout the country will likely see a tax increase.  As of 2016, in Virginia alone, there are over 2 million owner occupied homes and 69% of those homes carry a mortgage.

Thanks for Reading,

View Liz Schuyler- CDPE, SFR, e-PRO's profile on LinkedIn _________________________

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