Given the implementation of the new tax plan, numerous Americans are anticipating alterations to their financial circumstances. Although there are provisions that specifically impact homeowners’ taxes, it’s essential to note that not everyone will be subject to these changes. Explore our latest post to gain a comprehensive understanding of how the new tax adjustments will impact homeowners in FLORIDA!
The Standard Deduction
Some homeowners will see changes to their taxes, while others will hardly notice it. In addition, the standard deduction has nearly doubled. This means fewer people will be itemizing on their taxes, and the below deductions won’t be used in the first place.
Mortgage Interest Deduction
Until now, homeowners were able to deduct their mortgage interest up to one million dollars on their federal taxes. This deduction is now capped at $750,000. That said, approximately 94% of people with a mortgage aren’t paying that much to begin with. The good news is that if you purchased your house before December 15, 2017, you will still be grandfathered into the million dollar exemption, and be able to deduct a higher amount.
Property Tax Deduction
In the past, homeowners throughout the country could deduct the full amount of state, local, and property taxes they paid. However, the recent change imposes a cap of 10,000 on this deduction. While many individuals across the nation pay less than this threshold, homeowners in states with higher property taxes, such as California, New Jersey, and New York, are likely to experience more pronounced effects due to this limitation.
Home-Equity Loan Deduction
When people take out a home-equity loan, it is typically to make a large purchase. It can be for home renovations, repairs or even medical expenses. Under the new tax plan, homeowners can no longer deduct the interest paid on a home equity loan.
The Rules For Capital Gains
When selling their homes, homeowners can still take advantage of the Capital Gains exclusion, which allows homeowners to write off up to $250,000 of profit from the sale of a home. $500,000 if filing jointly. There was tak of changing this with the new plan, however, the Capital Gains exclusion remains as it was.
When engaging in the purchase or sale of any property in FLORIDA, it’s crucial to thoroughly examine all associated costs. The financial considerations extend beyond the mere sale price of the house. If you have inquiries or seek further insights, Core Real Estate Properties is readily available to provide assistance and information!