KC Condo Tracker

What The New Tax Bill Means For Your Mortgage Interest Deduction

December 21st, 2017 3:18 PM by AJ Gentry

We’ve been reading for weeks about the proposed tax bill and as REALTORS, concerned for our clients, we’ve been reaching out to lawmakers to hopefully save some of the tax benefits for homeowners. Today, we learned that while we didn’t get everything we were hoping for, we were able to impact some of the provisions in the bill positively. Below are some positive points for homeowners and prospective homeowners from the President of the National Association of REALTORS, Elizabeth Mendenhall:

  • Capital gains exclusion. In a huge win for current and prospective homeowners, current law is left in place on the capital gains exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home. Both the House and the Senate had sought to make it much harder to qualify for the exclusion.
  • Mortgage interest deduction. The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit. The House bill sought a reduction to $500,000.
  • State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000. Both the House and Senate bills seek to eliminate the state and local income tax deduction altogether.

It appeared for some time that the original tax bill may take away some of the value of owning a home. Something which collectively could have been a disaster for the housing market, which in recent years has been overall a strong market. After more than a year of seller’s market conditions in the greater Kansas City metro area, the market has somewhat evened out. Though inventory levels have remained around the 2-month level (meaning if no new homes were added to the market, we would run out of homes to sell in two months), buyers have still been out shopping fairly consistently. New home construction has not really slowed and even developments that stalled after the not-so-great bursting of the real estate market bubble of 2008, those developments have not only picked back up but some have even been completed.

2018 might be another great year to buy or sell a home and if you are thinking about exploring your options, our network of lenders, inspectors, and appraisers are some of the best in the business. Let us connect you with someone who can make your real estate transaction seamless. Our clients can attest that the more enjoyable and efficient their search, the more success they have in finding the right home at the right price. Let our team at Urban KC Living and KC Condo Source help you reach your goals. Give us a call at 816.699.0084 or drop us an email at Team@UrbanKCLiving.com today!

Posted by AJ Gentry on December 21st, 2017 3:18 PM



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