On December 22, 2017, Congress passed a new tax law to ultimately help entrepreneurs and the working class. This leaves many homeowners asking the question, “how does the new tax law affect my home?”.
Whether you are looking to purchase a home or sell your home in 2018, here are the 3 ways the tax change may affect your decision.
Mortgage Interest Change
With the new tax law, comes a decrease in the amount of interest a new homeowner can deduct on their mortgage. Previously, the total amount was $1,000,000, now it is $750,000.
The good news is that if you are a current homeowner this doesn’t affect you, and the average home purchase typically does not even come close to the cap. For those trying to sell their homes in bigger cities however, the new law could hinder their chances of selling.
Thankfully, there are many homes available in the Pittsburgh area below $750K, making it easier for sellers and buyers.
Find out more about the current condo and patio home listings, and learn how to sell your home!
No More Itemization
Because the standard deduction doubled from $6,350 to $12,000, the need to itemize decreases significantly. Before the new tax law most homeowners had to itemize their taxes, in order to take advantage of their mortgage interest deduction.
A higher standard deduction means less paperwork when tax season rolls around, and possibly a larger return! With perks like these, it makes it even more appealing to purchase your first home.
Curious about becoming a first-time homeowner? Check out these reasons why owning your own home is awesome!
State And Local Deduction Cap
Going hand in hand with the standard deduction increase is the decrease in state and local tax deductions. Under the new law these deductions combined are called “SALT” taxes, and reduced to a total of $10,000.
Before the change, most Americans chose to itemize these deductions, which has now been alleviated.
Crunching the numbers to save for your new home? Here are 6 ways to save for your down payment.
Find A Knowledgable Real Estate Agent
A real estate agent does much more than list your property. He or she will work in your best interests, provide you with the resources you need, help you price your home to attract as many buyers as possible, and assist you with all of the details. Our team of professionals are ready to guide you through the new tax law, and discuss how it affects your sale or purchase.
Give us a call at 724-344-4795 to talk about selling or purchasing a home in Greater Pittsburgh.