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 NY!
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
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 buying or selling any property in NY, it is extremely important to look at all costs involved. The numbers go beyond the final sale price of the house. If you have questions or want to learn more, Sell Now Realty Group is happy to assist!