With the new tax plan in place, many Americans are seeing prospective changes to their own finances. While there are provisions that change taxes for homeowners, not everyone will be affected. Check out our latest post to better understand what the new tax changes will mean for homeowners in FLORIDA!
The Standard Deduction
The recent changes in tax laws have varying impacts on homeowners, with some experiencing noticeable differences, while others may see minimal effects. Notably, the significant increase in the standard deduction means that fewer individuals will be itemizing their taxes. Consequently, certain deductions outlined below may not be utilized by a considerable portion of taxpayers.
Mortgage Interest Deduction
Previously, homeowners could deduct their mortgage interest up to one million dollars on their federal taxes. The recent change caps this deduction at $750,000. It’s noteworthy that around 94% of individuals with mortgages aren’t paying an amount exceeding this cap. Additionally, homeowners who purchased their houses before December 15, 2017, are grandfathered into the previous million-dollar exemption, allowing them to deduct a higher amount.
Property Tax Deduction
Homeowners nationwide used to be able to deduct any state, local and property taxes that were paid. This number is now capped at 10,000. Most people across the country pay less than that. However, for homeowners in states with higher property taxes, such as California, New Jersey, and New York, the effects will be more widely felt.
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 property transactions in FLORIDA, it’s crucial to consider all associated costs. The financial considerations extend beyond the property’s final sale price. If you have questions or seek further information, Core Real Estate Solutions is ready to assist and provide guidance!