2018 Tax laws. Are you a winner or loser?

Are you a winner or a loser when it comes to the NEW 2018 Tax Laws?

 

#1  – The Real Estate Investor:    If you invest in Real Estate you are the top winner of the new 2018 real estate tax laws.  As an investor you can still write off “all the expenses of owning and running a rental because the properties are considered a business.” according to CNBC.

 

#2 – First Time Buyers:  The new mortgage cap for First Time Home Buyers has dropped from $1 million dollars to $750,000.  Most new home buyers will not feel the impact of this law.  The national median price for a home is $270,000.

 

#3 – Existing Home Owners:       If you bought your home before the new tax laws came into effect you are grandfathered into the previous mortgage deduction cap of $1 million.

 

Now on the reverse side there has to be some losers in the situation

 

#1 – Renters:  If fewer people are able to afford buying a home that is going to cause rents to rise. Making the renter the top loser for the new tax law

 

#2 – Upper – middle class and luxury buyers:      The new $750,000 mortgage interest deductible could cause an issue for some of the upper middle class.

 

#3 – Homeowners in the coastal blue states:      Because the law is now limited to $10,000 in State and Local Income Tax (SALT) coastal state residents with high SALT tax will no longer benefit from these deductions.

 

#4 – Home Owners seeking Equity Loans:  If you are seeking out a home equity loan for tax deductions you might want to check again.  There are new rules in place that say what the equity loan has to be used for in order for you to be able to use it as a valid deduction.

 

 

If you would have any questions on these new changes and how they will affect you or the current real estate market.

Please feel free to give us a call anytime!  253-307-6438