On December 22, 2017, the President signed the Tax Cuts and jobs Act. This new law has specific impact on real estate. It impacts that which you already have and any future real estate you will acquire.
Below is a table summarizing the changes:
|Tax Item Deduction||New Law||Prior Law|
|Maximum Loan Interest||$750,000 (For purchases after 12/14/17||$1,000,000|
|Equity lines of credit||None||Up to $100,000|
|State and Local Taxes total||$10,000||No maximum|
|Capital Gains Exclusion||No change||Must be owned 2 of last 5 years|
|Like Kind Exchanges (1031)||Unchanged for real estate only|
|Real Property Depreciation||Unchanged|
|Capital Gains Tax Rates||Unchanged|
Much has been broadcast about the benefit of homeownership in relation to the new law. At Properties on the Potomac, Inc. we view homeownership as a form of supreme independence and wealth building for the following reasons:
- Real Estate builds your wealth through
o Appreciation of a large asset and the use of OPM (other people’s money)
o Your mortgage payments pay down your principal, thus building your equity
- Owning your own home gives you control over your living situation.
- Tax savings remain a significant benefit of ownership.
- Owning a home is a financially sound decision.
- You can keep, rent out, sell, or will your real estate as you determine is best for you.
To read the entire Bill click here.