How the new tax laws affect the New York real estate sector
Last December the House and the Senate voted to pass the final GOP tax bill into law. According to business insider, several housing markets in the Northeast will see home prices fall behind typical growth as a result of this reform.
Here’s what you need to know about how it will affect the market in New York:
1. Homeowners can deduct interest on mortgages only up to $750,000. The previous cap was $1 million, with an additional $100,000 allowed for home equity loans.
2.Interest on home equity loans and lines of credit are only deductible in certain circumstances. According to the IRS, the Tax Cuts and Jobs Act states that interest paid on home equity loans and lines of credit is still deductible, as long as they money is used to “buy, build or substantially improve” the taxpayer’s home that secures the loan in question.
3. Homeowners will face a $10,000 cap on what they can deduct on their state and local taxes.
4. Tax Bracket Change: Highest bracket is now at 37%, which is down from 39.6% in previous years
According to research from Moody’s Analytics, business insider put together this chart to show the 25 counties expected to lose the biggest percentage of potential value with only six located outside of New Jersey or New York:
To estimate what Trump’s new tax plan means for you, try this Tax Plan Calculator: http://taxplancalculator.com/
To learn more about the new tax law and how it can affect the real estate market, contact Stephanie Mangels, NY State Manager at smangels@res-title.com
Sources: NPR.com
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