Now that the House and Senate have passed their own versions of tax reform, homeowners are wondering what’s next? There’s no reason to panic just yet because we don’t know which version will be adopted. Furthermore, the majority of mortgage interest deductions won’t be affected anyway since the majority of mortgages are under $500,000. For the higher priced areas we certainly hope that the Senate version will prevail.
Here’s a breakdown on the legislation:
Deductions
Senate Version
House Version
Capital Gains Exclusion
Owner must have lived in the property for 5 of the last 8 years
Same
Property Taxes
Deduction limited to $10,000
Same
Mortgage Interest
Deductions on loans up to $1-million
Deductions on loans up to $500,000
State & Local Taxes
Not deductible
Same
Second Home Mortgages
Not deductible
Same
Moving Expenses
Not deductible
Same
Home Equity Line of Credit
Not deductible
Same
Interest on Student Loans
Not deductible
Same
The next step is for both sides to come to an agreement on a final bill. And then that bill needs to be voted on. It’s not too late to make your voice heard. Let your congress member know what you’re thinking! Click here for an easy way to contact them.