How does the new tax law impact homeownership?
The new tax law, effective January 1, 2018, impacts some important benefits of homeownership:
Mortgage interest deductions
The new law does not affect the $1 million interest deduction limit for homeowners who got their mortgage before December 15, 2017. The new law, which applies to mortgage debt incurred on or after that date, allows interest to be deducted on mortgages worth up to $750,000.
Property tax deductions
The new law puts a $10,000 cap on the amount of state and local taxes, including property taxes, that can be deducted from a federal return. Previously, the deduction was unlimited.
Home equity loan interest deductions
The new tax law no longer allows homeowners with home equity loans or lines of credit to deduct the loan’s interest from a federal return. This deduction was previously allowed up to $100,000, and there is no grandfather clause. Note: Academy Mortgage does not provide home equity loans.